Wedbush Offers Q4 Preview For IMAX, Revises Estimates Downwards

In a report published Monday, Wedbush analyst Michael Pachter wrote that IMAX Corporation (NYSE: IMAX) is expected to report an in-line fourth quarter print on Thursday before market open, despite the analyst's lowered estimates.

Pachter lowered his fourth quarter revenue estimate to $93 million from a prior estimate of $102 million after calculating lower worldwide box office data than previously anticipated. The analyst also lowered his earnings per share estimate to $0.30 from a previous $0.37.

"Q4 total domestic box office was down 4.4 percent, with a lower concentration of premium tickets sold by exhibitors during the quarter," Pachter argued in his note.

The analyst noted that October was up 20.3 percent year over year with two IMAX releases (Fury and Dracula Untold, coming in fourth and fifth for the month, respectively.) November was down 9.8 percent year over year with IMAX release Interstellar coming in third. Finally, December was down 13.8 percent year over year, with IMAX release The Hobbit coming in first in December box office.

Looking forward, Pachter argued that the company's backlog continues to grow, especially in Asia where the company has signed several agreements throughout China over the past few months. IMAX also announced in November it will have a presence in Tokyo soon and a similar announcement it will enter Vietnam. However, the analyst suggested that it could take several years before the new markets contribute meaningfully to the company's revenue stream.

Pachter maintained a Neutral rating with a price target raised to $30 from a previous $28. The analyst cited uncertainty if the firm's new deals in China will unlock significant value in share prices that isn't already reflected in its current price.