February 24, 2011 / 12:56 PM / 7 years ago

UPDATE 2-Imax profit rises as theater network grows

* Q4 adj EPS 21 cents vs yr-ago 20 cents

* Sees revenue, earnings growth in 2011

* Expects to install more than 100 new theaters in 2011

* Shares down 3.5 pct in Toronto (Adds CEO, analyst comments, details, share price; in U.S. dollars unless noted)

TORONTO, Feb 24 (Reuters) - Imax Corp IMX.TO(IMAX.N) posted a higher quarterly profit on Thursday, driven largely by a growing global network of its big-screen theaters, which it expects to expand further in 2011.

Imax has ridden a wave of popularity for 3D movies and its large-screen format in North America, as well as in emerging markets such as China, as the format is seen by price-conscious consumers as an “affordable luxury”.

Imax screenings of Disney’s (DIS.N) “Tron: Legacy” generated almost a quarter of the science-fiction film’s U.S. box office receipts with only 2 percent of its screenings.

The company has also benefited from deals to show films in its theaters ahead of their wider release, including showing “Tron” a week earlier in France and “I am Number Four” a week ahead in Mexico.

“It’s a statement by the studios that we’re a unique, premium experience,” Imax Chief Executive Richard Gelfond said in an interview, adding the company expects to install more than 100 new theaters in 2011.

The Toronto-based company said it expects to increase both revenue and earnings in 2011.

It said its net income in the quarter rose to $54.2 million, or 80 cents a share, from $4 million, or 6 cents, a year ago. Revenue jumped to $69.2 million from $54.2 million.

Excluding one-time items, including a $54.8 million tax benefit, earnings in the quarter rose to $14.3 million, or 21 cents a share, from $12.9 million, or 20 cents a share.

Analysts, on average, had expected earnings of 21 cents a share, excluding items, on revenue of $60.8 million, according to Thomson Reuters I/B/E/S.

“At first blush, we are impressed with the quarter and see an upward bias to our estimates,” Piper Jaffray analyst James Marsh wrote in a note, pointing to an impressive gross margin of 52.6 percent compared with his estimate of 44.4 percent.

The improved margin was a result of a greater share of revenues coming from joint ventures and other recurring sources, Gelfond said.

The company said it installed 27 joint revenue-sharing systems and 27 sales-type lease systems in the quarter, beating its own guidance. [ID:nN28120435]

At the end of 2010 it had a backlog of 224 theater systems, including 59 joint-revenue deals and 165 systems under sales and sales-type lease arrangements.

“For the next few years, between the backlog and the level of interest I see a fairly promising story for the growth of the network,” Gelfond said.

Imax switched its U.S. listing to the New York Stock Exchange from Nasdaq effective Feb. 11.

Shares in the company fell 3.5 percent to C$26.51 in Toronto and skidded 3 percent to $26.95 in New York by late Thursday morning. (Reporting by Alastair Sharp and Euan Rocha; editing by Rob Wilson)

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