IMAX Earnings Preview: Summer Looks Bright

According to analyst Michael Pachter at Wedbush MorganIMAX (NASDAQ:IMAX) is going to deliver in-line earnings on Thursday.

Here’s Pachter’s bullet points for his preview of IMAX earnings:

IMAX will report Q1 2011 results before the market open on Thursday, April

28, and hold a conference call at 5:30am PT (dial-in: 800-901-5217, conference ID: 76417399, webcast:

Lowering Q1:11 estimates. Lowering our revenue estimate to $60 million from $61 million to reflect slightly lower-than-expected box office, and lowering our EPS estimate to $0.18 from $0.21 due to increased SG&A. We note that IMAX’s (NASDAQ:IMAX) share price increased roughly $4 during Q1:11, which should result in higher variable stock comp (included in SG&A). On its Q4:10 call, management noted every $1 change in IMAX’s share price had an impact of ≈ $1.1 million on reported results.

Expecting in-line Q1:11 results. We expect the company to report results in-line with our revised estimates for revenue of $60 million and EPS of $0.18, compared with consensus for revenue of $51 million and EPS of $0.11. The company does not provide forward financial guidance.

IMAX remains poised for a strong summer due to many high-profile releases. Although several Q1:11 releases were disappointing at the box office (most notably Mars Needs Moms), the summer has many potential blockbusters, including Pirates, Kung Fu Panda, Cars, Transformers, and Harry Potter sequels).

IMAX continues to take orders for new theaters at a feverish clip. IMAX (NASDAQ:IMAX) signed contracts for 123 theater systems in 2H:10, compared to only 25 in 2H:09. We think that there is room for at least 600 screens domestically and 1,200 screens internationally, giving IMAX the potential to average 150 new theaters per year for many years, ending above IMAX’s estimate of 400 domestic and 800 international.