TORONTO (Reuters) ? Shares of Imax Corp sank 14 percent on Thursday after the big-screen movie company reported an 87 percent drop in second-quarter profit, hurt by a disappointing box office.
But Imax said its global expansion continued apace with strong theater installations. It also said third-quarter box office was off to a strong start, generating $88 million in ticket sales for blockbuster films such as the new "Transformers" and the final installment in the "Harry Potter" series in less than a month.
"While the quarter did not live up to our financial expectations, more fundamental to the long-term value of our business is the fact that we have signed 153 theater deals year-to-date, are installing theaters at a rapid rate and are sitting on a record backlog of close to 300 Imax theater systems," said Imax Chief Executive Richard Gelfond.
The Toronto-based company reported net income of $1.8 million, or 3 cents a share, compared with $13.3 million, or 20 cents a share, a year ago.
On an adjusted basis, it earned 7 cents a share. Analysts had expected adjusted earnings of 20 cents a share, according to Thomson Reuters I/B/E/S.
Overall revenue rose 3 percent to $57.2 million, in line with average estimates.
Despite the miss on earnings, an analyst suggested Imax remained a strong long-term investment.
"There is no justification for this kind of decline," said Aravinda Galappatthige from Canaccord Genuity. "The value of the company is driven by future growth and the fact that this was going to be bad quarter was known," he said.
Imax shares were down 14 percent at $20.92 in New York by late morning and at C$19.91 on the Toronto Stock Exchange.
The stock had slipped about 14 percent this year prior to the results.
($1=$0.95 Canadian)
(Reporting by Alastair Sharp in Toronto and Bhaswati Mukhopadhyay in Bangalore)
Source: http://us.rd.yahoo.com/dailynews/rss/movies/*http%3A//news.yahoo.com/s/nm/20110728/media_nm/us_imax
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