3D Technology Company RealD Posts a Surprise Quarterly Profit
Concerns that moviegoers are tiring of 3D are overblown in light of surging popularity in foreign markets, the company says.
Jeffrey Katzenberg and the rest of Hollywood's 3D evangelists might be breathng a sigh of relief as RealD on Thursday posted a surprise profit in its fiscal fourth quarter.
RealD, a licensor of the sort of technology that enables 3D movies in theaters, earned $4.3 million during the quarter compared with a loss of $18 million in the same quarter last year. Revenue rose 6% to $58.5 million.
In its earnings materials, RealD defended its model against detractors who have claimed that trends indicate consumers aren't as anxious as they once were to pay extra to see a film in 3D.
"Any individual film's dip in domestic 3D box office is being offset by surging international box office," the company said, using Pirates of the Caribbean: On Stranger Tides and Kung Fu Panda 2 as evidence. The former generated 66% of its opening weekend international box office from 3D, the latter, 60%.
"While questions about 3D's staying power have been raised in the past, these concerns have proven short sighted," the company said .
RealD said Despicable Me is often used as evidence of shrinking interest in 3D because it generated only 45% of its domestic opening weekend box office from 3D.
But, says RealD, "Despicable Me ultimately delivered exceptional results at the 3D box office, ranking as RealD's third highest grossing film in fiscal 2011."
The company noted that 10 films during the quarter generated $1 million or more each in admission-based license revenue for RealD compared to only two in the same quarter a year ago.
The company said there were 15,000 RealD screens at the end of its fiscal year, an increase of 183% over last year. Twenty-six 3D films were released in RealD's fiscal year, a 100% increase over the year prior, and the company expects 38 films in its current fiscal year.
Despite the positive results, after rising fractionally to $24.07 during regular trading stock in RealD was down as much as 6% in the after-hours session. The stock is down 7% so far this year.