I Doubt IMAX Will Beat Earnings Tomorrow

As you may or may not know, IMAX is scheduled to report second quarter 2007 earnings tomorrow morning at 8:30 eastern time.

To the best of my ability, I can't identify any reason why IMAX should beat earnings tomorrow, aside from the impressive theatrical runs of 300, Spiderman III and most recently Harry Potter and the Order of the Phoenix. While these results are beneficial, IMAX's true revenue generating streams come from the actual signing of of theater installs. Due to the company's recently announced alteration in theater install revenue recognition, and massive theater backlog, it is exceedingly difficult to calculate install revenue.

Questionable revenue timing aside, IMAX's options activity was quite interesting today. As you can see in the schematic below, nearly 800 $5.00 August call options traded hands. This may seem small compared to the option activity seen in large equities such as Cisco Systems (CSCO) or Exxon Mobil (XOM), but today's volume effectively double the entire open interest volume (1,261) in one day of trading! Many investors and traders believe that abnormal or higher option activity can allude to events to come. With minuscule August $5.00 put option volume at 226, one could believe that good news is just around the corner. Earnings, anyone?

See IMAX at Scottrade here.

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