Time Warner Inc (TWX), IMAX Corporation (USA) (IMAX): These Stocks Will Be Blockbusters This Year

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From what I am currently seeing, the summer of 2013 looks like it will be very hot.  No, I’m not talking about a heat wave–I’m talking about all the movie releases planned by the different production houses. Here’s a glimpse of the schedule of two of the biggest film-producing companies in the coming months.

Name Release Date
Time Warner Inc (NYSE:TWX)
The Hangover Part III May 24, 2013
Man of Steel June 14, 2013
Pacific Rim July 12, 2013
Viacom, Inc. (NASDAQ:VIAB)
G.I. Joe: Retaliation March 28, 2013
Star Trek: Into Darkness May 17, 2013
World War Z June 21, 2013

Source: Films-releases.com

Some of them are sequels to blockbuster franchises, and others are new ideas that have high expectations attached to them. Whatever the case may be, I feel that these movies are capable of achieving great things at the box office. To support my expectations there is the past performance of movie production divisions of Warner and Viacom, i.e. Warner Bros. and Paramount Pictures, respectively. The past year’s box office collection of these two brands exceeded $5.1 billion. Additionally, the success of these production houses complements the performance of companies like IMAX Corporation (USA) (NYSE:IMAX). Let’s dig into eachcompany and see how they are doing.

IMAX Corporation (USA) (IMAX)

IMAX Corporation

IMAX reported a decent fourth-quarter of 2012, giving a beating to the consensus estimates. It had revenue of $77.8 million and adjusted earnings of $27 million (up 17% and 29% year-over-year, respectively). With the earnings came the guidance for new theaters in 2013.

In 2013 the company expects to open around 110 new theaters. This incorporates additions from a backlog that stood at 276 at the end of 2012, some new signings in the year that should be completed in the year itself and allowance for some slippage in the scheduled openings. Additions in 2013 are expected to be back-end loaded to a considerable degree. And it is also expected that most of the new theaters will be opened via joint ventures. The additions will increase the reach of IMAX Corporation (USA) (NYSE:IMAX) in both the local and global markets.

Of the backlog, approximately 80% will be installed internationally to increase its global footprint. Additionally, half of the signings last year occurred in Asia, and China represented one-third of the total signings. The company’s inclination towards China is also evident from the fact that IMAX had 108 operating theaters and around 44% of total backlog theaters in China. IMAX sees the country as the second largest market after the US. In 2012 the overall Chinese box office contributed about $2.7 billion (up 30% year-over-year) and is continuously growing. Taming this beast should be beneficial for the company in the future.

Apart from these expansions, 2013 seems strong to me because of a long list of sequels of blockbusters like G.I. Joe, Iron Man, Star Trek, The Hunger Games, The Hobbit, 300, Hangover and The Man of Steel. These should be well received by IMAX Corporation (USA) (NYSE:IMAX)’s core fans boys’ audience and will drive the year in terms of box office returns.

Time Warner Inc.

The struggle of the publication segment of Time Warner Inc (NYSE:TWX) is no secret. In the last-quarter there was a decline in the division’s revenue and operating income. Both fell by 7% and 10% year-over-year, respectively. The good news is that in order to overcome this decline and improve the profitability of the company, Warner has decided to spin-off the publishing division and cut its losses. Now, the focus of the company will be on the more profitable cable television and movie production businesses.

Apart from the spin-off, 2013 looks to be a strong one considering the upcoming squeals of blockbuster franchises like The Hangover, 300, and The Hobbit. Previous editions of these franchises have made around $2.5 billion in box office collections. Additionally, there are high expectations from the high budget sci-fi movies like Pacific Rim and Superman: The Man of Steel.

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