Imax Shows Signs

While the American mantra that bigger is better hasn't seemed to pay off for Canadian movie tech outfit Imax (IMAX Quote), things could be looking up for investors in the maker of huge screen spectaculars.

The fervor surrounding mobile small screen technologies, home theater systems and other viewing platforms has left Imax, the producer of large scale theatrical magic, caught in a vortex of doubt about whether the company can capitalize on its mission.

Imax Thursday rolled out a partnership with Time Warner's (TWX Quote) Warner Brothers to release the studio's next blockbuster, V for Vendetta, starring Natalie Portman, on Imax this March.

Both companies have enjoyed a steady stream of stellar box-office returns with their recent ventures. And beyond already announced deals, which already include some much anticipated films like Superman Returns, if Imax now adds at least one more big picture to its 2006 film slate, which sources say it will, it will further validate its growing reputation as a box office booster with Hollywood studios.

While all the industry rage and chatter is about how much content media companies can jam on tiny video screens, Imax skips along signing lucrative licensing agreements around the world and striking deals with Hollywood studios to put their fare out in Imax.

In 2005, Warner Brothers' Charlie and the Chocolate Factory, Batman Begins and the latest Harry Potter all surpassed $200 million in box office, a record that was especially poignant in a year when overall box office returns declined 5%. But Warner Brothers hit those numbers with significant Imax help.

The returns helped Warner beat out News Corp.'s(NWS Quote) 20th Century Fox by $25 million overall last year, with Imax-generated box office on the films accounting for about $100 million of the yield.

But the stock has suffered significantly over the last couple of quarters, missing by a penny here and a penny there, and sending the stock down to the low end of its 52-week stride at $7 from higher levels of $10 and $11. Investors are scratching their heads about this company.