Imax Looks to Cast a Spell
Imax (IMAX) is hoping Harry Potter can work his magic on the movie company's stock.
Harry Potter and the Goblet of Fire hit theaters last weekend with a bang. The movie, made by Time Warner's (TWX) Warner Bros. studio, delivered strong gains for Imax at a good time, right in the middle of a big fourth quarter for the company.
Imax, which is based in New York and Toronto and makes money mostly from theater licensing, has suffered a couple of tough quarters after missing earnings estimates. Its stock is off 12% in three months. But with the opening numbers for Harry Potter and the Goblet of Fire beating the last Imax-converted endeavor, Charlie and the Chocolate Factory, by 33% on roughly the same number of screens, Imax's Richard Gelfond is optimistic.
"These numbers are definitely better than expected," says Gelfond, who is co-chairman along with Brad Wechsler. This weekend, Tom Hanks' Polar Express will be re-released on Imax screens to coincide with an expanded DVD release of the film. Warner Bros. has been promoting the Christmas flick heavily while touting the Imax experience. Gelfond says pre-sales in London and at an Imax owned and operated theater in Sacramento have been "very encouraging."Still, questions persist, thanks to box-office volatility and to worries that exhibitors may choose digital upgrades instead of Imax. Earlier this month Piper Jaffray's Anthony Gikas lowered his target price to $9 from $10, citing reduced installation guidance and the risk associated with big December expectations. "Installations in the period were 7 vs. our 11 estimate," wrote Gikas, who rates the stock market perform. "Fewer installs were offset in part by better-than-expected films revenue in the period." The firm does business with Imax. Others see progress but caution that the going will be slow. "The story
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