Day Dreams to Nightmares For One Company



When people are looking for action packed, 3D movies, they normally think of IMAX (NYSE: IMAX). IMAX is the most widely used system for special-venue film presentations. As of September 2012, there are 697 IMAX theatres in 52 countries. Though revenues decreased 6% in 2012, their stock rose almost 14%. While its stock performed worse than Cinemark or Regal, it did post a remarkable 488% increase in capital expenditures, which correlated to its 242% decrease in FCF. IMAX seems to be focused on growth, which could work to the advantage of companies such as Walt Disney (NYSE: DIS) and DreamWorks Animation (NASDAQ: DWA).

Disney saw approximately a 2.5% increase in revenues, though the company has other avenues of revenue. Their business is separated into five different business areas of media networks, parks and resorts, studio entertainment, consumer products and interactive media. ESPN, Disney Studios, and parks and resorts made up over 70% of Disney's revenues in 2012. With a 31% increase in Disney's stock, they didn't perform as well as Cinemark, but they did post a 28% increase in FCF and over a 6% increase in capital expenditures. Though there doesn't seem to be anything magical about their stock, it does seem to be on a steady increase both short term and long term.

Disney saw approximately a 2.5% increase in revenues, though the company has other avenues of revenue. Their business is separated into five different business areas of media networks, parks and resorts, studio entertainment, consumer products and interactive media. ESPN, Disney Studios, and parks and resorts made up over 70% of Disney's revenues in 2012. With a 31% increase in Disney's stock, they didn't perform as well as Cinemark, but they did post a 28% increase in FCF and over a 6% increase in capital expenditures. Though there doesn't seem to be anything magical about their stock, it does seem to be on a steady increase both short term and long term.

DreamWorks is an American animation studio based in Glendale, California, and has created films such as Shrek 2, Shrek the Third, Shrek Forever After, and Madagascar 3: Europe's Most Wanted - all four of which rank in the top 50 highest grossing films of all time. Even with films like this, revenues decreased over 11% in 2012. DreamWorks seems more like a nightmare than a dream as FCF decreased 410% and capital expenditures fell 19% in 2012. Shareholders felt the result of this as the stock fell over 9% last year.

The Bottom Line New movie releases for any of these companies could play a major role in how they perform, but it’s difficult to know which films will succeed and which will fail. After all, the industry is ever changing and full of unknowns. It does seem as though DreamWorks is a company that I would avoid having too much hope in at this time. It would be difficult to just pick one company between Cinemark, Regal, or Disney as 'most likely to succeed' in the class of 2013. They have all shown a steady history of success, and still post favorable numbers.

Read More: http://beta.fool.com/tlwofford/2013/01/15/hollywood-bad-investment/21280/?ticker=DIS&source=eogyholnk0000001



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