Why RealD Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our thesis.

What: Shares of RealD (NYSE: RLD  ) popped 10% Thursday after the 3-D movie visual technology specialist released better-than-expected fiscal third-quarter 2014 results.

So what:  Quarterly revenue came in at $55.4 million, which translated to a net loss of $0.01 per share. By contrast, analysts were looking for a wider loss of $0.08 per share on sales of $48.61 million.

The movie Gravity, in particular, has paved the way for RealD's outperformance during the last year, delivering more than $300 million in RealD box-office ticket sales to date. 

Now what: Gravity's success demonstrates just how effective RealD's platform can be, and an enviable slate of more than 20 upcoming films will incorporate its tech, including Captain America: The Winter Soldier, Amazing Spider-Man 2, Transformers: Age of Extinction, and The Hobbit: There and Back Again.

But the company also knows it still has work to do increasing the penetration of high-quality 3-D films to achieve sustained profitability over the long term. For now, I'd prefer that RealD stay on my watchlist to keep tabs on its progress.

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