IMAX loses less money in Q4 -- should we be excited?

Unfortunately, this performance was not good enough for the analyst community. Wall Street wanted a loss of $0.08 according to this article. That article also mentions how management is doing its best to control costs. It's good to see that IMAX is keeping a lid on expenses. It's too bad, though, that the company couldn't meet analyst targets. Shareholders want to see losses turn into profits as quickly as possible. Also, IMAX saw a 13% revenue decline in the quarter, plus a loss for the entire fiscal year. This makes me uneasy about IMAX as a potential investment idea.

It's true that IMAX perhaps didn't do as well as it could have in Q4 because of Time Warner's (NYSE: TWX) decision to release the next Harry Potter film in summer 2009 instead of winter 2008 (see Zac Bissonnette's take on this issue). But that isn't enough to sway my view on the stock. I'd say that IMAX is one to be avoided. Yes, the movie industry will continue to leverage IMAX theaters to improve the exhibition experience for audiences. With so much competition from home-theater systems, it's important that studios such as Disney (NYSE: DIS), Viacom (NYSE: VIA), and News Corp. (NYSE: NWS) promote the IMAX experience to get more people to see their products before they hit other distribution platforms. Still, I don't like these reported losses, and I don't like IMAX's current below-$5 stock price. The shares are down 3% as I write this. I understand that the IMAX business model costs a lot to implement; that doesn't mean, though, that I have to invest in it. Therefore, I think there are better alternatives out there for your portfolio than IMAX.

Disclosure: I own Disney; positions can change without notice.