Imax Gains as ‘Hobbit’ Boosts JPMorgan Forecast

Imax Corp. rose to its highest price in more than five months after JPMorgan Chase & Co. boosted its sales and profit forecasts on higher-than-expected audience turnout for 3-D films such as “The Hobbit.”

Imax gained 5.4 percent in Toronto to C$23.75, the highest price since July 25. It was also the biggest gain since Oct. 11 for the Mississauga, Ontario-based company.

“The Hobbit,” a prequel to Peter Jackson’s “Lord of the Rings” saga, grossed $46 million for Imax in December and continues to perform well in January, said Townsend Buckles, a JPMorgan analyst in New York, in a research note dated today. He raised his expectations for Imax’s fourth-quarter box office receipts to $146 million from $130 million and for adjusted earnings to 18 cents a share from 17 cents.

“The Imax experience continues to be very engaging for theatergoers,” said Paul Sweeney, a media analyst with Bloomberg Industries, in a telephone interview from Skillman, New Jersey. “Although the outlook for 3-D films may have sobered up in 2012, Imax remains very robust.”

According to Sweeney, 3-D now accounts for about 45 percent to 50 percent of a given film’s box-office receipts, less than industry analysts had expected since the technology regained popularity with James Cameron’s 2009 blockbuster “Avatar.”

Imax has placed its theaters in city areas with demographics that can afford the premium price, as well as expansion into developing markets, especially Brazil, Sweeney said.

Strong Profits

Imax’s growth in emerging markets and its slate of blockbuster movies will make profits “strong” this year and next, Buckles said in his note. He didn’t immediately return a phone message.

The film industry’s box-office growth in 2012 is expected to continue this year, Sweeney said. Domestic box-office receipts rose 6.1 percent in 2012 to $10.8 billion, the first year-over-year increase since 2009, data compiled by Bloomberg show.

Imax Chief Executive Officer Richard Gelfond wasn’t immediately available for an interview, said Whit Clay, a company spokesman who works for Sloane & Co.