RealD Shares Surge 19 Percent on Quarterly Financials

The company lost more in its second fiscal quarter than it did last year, and its revenue shrank, but Wall Street expected worse.

RealD, the the 3D film technology company, said on Tuesday that it lost $4.7 million in its fiscal second quarter on revenue of $43.9 million, representing a deterioration on both the top and bottom lines, but Wall Street nevertheless cheered the results.

In the same quarter a year ago, the company lost $4.2 million on $55 million in revenue.

RealD said a week ago that it was laying off about 20 percent of its workforce, and analysts were expecting that Tuesday's earnings announcement would be uglier than it actually was.

RealD shares have been sinking, along with moviegoers' interest in 3D, and are down 38 percent so far this year. The stock was unchanged at $7 during the regular session on Tuesday but surged 19 percent after the closing bell when the company released its financial results.

The company had previously acknowledged that 3D box office for movies available in 3D represents just 30 percent of the domestic total nowadays, down from 70 percent three years ago. In 2009, 81 percent of the domestic box office revenue for Avatar came via 3D.

Still, RealD CEO Michael Lewis was upbeat Tuesday about the results, mostly because he said the popularity of Gravity proves that consumers will still gravitate toward 3D movies if circumstances align properly.

"The success of Gravity demonstrates that RealD's platform can deliver strong results when the combination of a high quality 3D film, effective 3D marketing and optimum screen availability come together," Lewis said.

In the current quarter, RealD has, in theaters, Gravity, Metallica: Through the Never, Free Birds and Thor: The Dark World. Upcoming in the quarter is Frozen, The Hobbit: The Desolation of Smaug, Walking With Dinosaurs and 47 Ronin.