Leading global entertainment technology company, IMAX Corporation (IMAX) extended its revenue-sharing contract with AMC Entertainment Holdings, Inc. (AMC) – the second-largest cinema chain in the U.S. – to include 11 new IMAX theatres.
The additional screens will receive IMAX facilities for a 13-year lease term from the date of installation. Meanwhile, the screens will be installed in locations including New York, Newark, Chicago and Phoenix. With this recent agreement, IMAX’s revenue-sharing contract with AMC Entertainment Holdings covers 159 theatres.
In June, IMAX strengthened its partnership with Ster-Kinekor Theatres, a unit of Primedia (Pty) Ltd, with the launch of two theatres in South Africa. The first movie hall is scheduled to be opened by the end of August at The Grove Mall in Pretoria East while the next will be inaugurated in the second half of 2015 at the Eastgate Shopping Centre in Johannesburg.
During the second quarter, IMAX installed 19 new theaters. Notably, the company had 408 theatres operating under joint revenue-sharing arrangements as of Jun 30, 2014 as against 336 theatres a year ago. Hence, we believe that these strategic deals will certainly boost the company’s top line. In the recently concluded quarter, the company’s revenues came in at $79.1 million, down 3.1% year over year. However, the figure surpassed the Zacks Consensus Estimate of $76 million.
IMAX currently carries a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Better-ranked stocks worth considering in the same sector include Lions Gate Entertainment Corp. (LGF) and Media General Inc. (MEG). While Lions Gate sports a Zacks Rank #1 (Strong Buy), Media General has a Zacks Rank #2 (Buy).