As an investment, IMAX
What has changed? In part, today's announcement that General Electric's
It also helps that IMAX is finally proving to be the place to exhibit tent-pole movies. The recently released 2-D movie Batman Begins from Time Warner's
If that doesn't seem like a lot of screens, it isn't -- relatively speaking. Regal Entertainment
Selling IMAX systems is still the heart and soul of this company. Last quarter, systems accounted for 65.7% of sales and almost all of the earnings. The films division, 17.2% of sales, contributed a paltry $308,000 to operating income -- but that will change as commercial films fill more theaters and when the Batman results hit the books. IMAX is also bringing back last year's Christmas success, the 3-D version of Polar Express. It generated $45 million on its first pass through IMAX theaters, and with the development costs already expensed, it could be highly profitable again.
Back in 2003, IMAX's stock rocketed to $10.40 in advance of another Matrix installment, The Matrix Revolutions. Here in 2005, with the Matrix hype long over, the stock has fallen by 8.7% and it sitting at around $9.50 a share. But analysts expect the company to compound earnings at 20% a year annual rate for the next five years -- about double the expected growth rate for the S&P 500. That seems reasonable now that IMAX appears to finally be hitting critical mass.
While traditional theaters are suffering through their third straight year of declining attendance, IMAX's commercial theaters are thriving. Customers seem willing to shell out the money for the big screen and the fantastic sound that IMAX offers. Maybe it's the movie experience we've all been waiting for, with shareholders in IMAX finally coming out as giants.