What happened
Entertainment technology specialist IMAX (IMAX -1.77%) lit up the silver screen on Friday, rising as much as 16.6% on a day when most stocks took a deep dip instead. The provider of larger-than-life cinema experiences crushed Wall Street's revenue estimates in Thursday night's fourth-quarter earnings report.
So what
In the fourth quarter, IMAX's total revenue fell 55% year over year to $56 million. Your average analyst had expected an even deeper plunge to approximately $47 million. This was technically a mixed report because the bottom line showed a net loss of $0.21 per share, slightly worse than the Street's projected loss of $0.20 per share. Investors shrugged off the mild earnings miss to focus on a huge revenue surprise instead.
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Now what
The solid top-line result sprung from several popular local-language releases in China and Japan. The global network of IMAX theaters also continued to expand with 33 new installations and 11 new orders for future deployments. IMAX ended the quarter with 527 systems in the backlog and 1,650 active theaters.
"Given strong demand for The IMAX Experience in Asia, the extremely promising pipeline of Hollywood blockbusters, and the accelerating pace of vaccinations in North America and Europe, we remain confident and optimistic that the global film industry is poised for a strong and sustainable recovery in the second half of 2021," IMAX CEO Richard Gelfond said in the press materials.
The movie theater industry is a tough place to make money right now and a full recovery may be years in the making -- if it ever arrives. That being said, IMAX's premium movie experience sets it apart from the competition and this is the only stock in the struggling cineplex sector that I would consider owning. While IMAX is posting respectable results, many of its competitors are fighting just to keep the lights on.
