Snapshots change when they become moving pictures.

Shares of Shutterfly (Nasdaq: SFLY) opened nearly 10% higher this morning after the company posted better-than-expected quarterly results. However, all of those gains were gone just three hours later.

Wall Street can be fickle that way.

The report itself was solid. Revenue soared 60% to $91.3 million. Yes, Shutterfly posted a loss -- this is the slow time of the year for a highly seasonal business -- but the deficit of $0.29 a share was smaller than the $0.32-a-share hit that the market was expecting.

Shuttefly's top line was padded by last year's acquisition of high-end personalized invitations, greeting cards, and stationery products specialist Tiny Prints. Wall Street knew that, yet the pros were still only targeting quarterly revenue of $84.9 million.

The market was impressed, and the analysts at R.W. Baird raised their price target on the stock from $32 to $40.

Shutterfly's guidance is also decent, with the company moving its top-line outlook higher after emerging as the only bidder for Eastman Kodak's (OTC: EKDKQ) Kodak Gallery business.

This should be a good time for Shutterfly. In a world of Facebook photo-sharing and Instagram, many shutterbug sites are either closing down or cashing out on the cheap. Shutterfly was alone in taking on Kodak Gallery's content and accounts. American Greetings (NYSE: AM) wasn't even able to smoke out a buyer for PhotoWorks when it shut the digital photography website down last year. Yahoo!'s (Nasdaq: YHOO) Flickr is still popular, though it did dump its own namesake photo site five years ago.

Shutterfly makes sharing snapshots work through e-commerce. We're not talking about traditional photofinishing, as prints make up less than $15 million of Shutterfly's revenue. The company offers a wide array of personalized products, in line with what Vistaprint (Nasdaq: VPRT) has achieved with personalized business products.

Shuttefly and Vistaprint remain very profitable and are growing their net sales at double-digit clips. The sectors may not be pretty, but there's something to be said about a company that can flourish in an unloved niche.

Digital future
Smartphones with good cameras are giving shutterbugs new ways to express themselves wirelessly. Even though the next trillion-dollar revolution will be in mobile, there will be some surprising winners. A free special report will get you up to speed