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 investing thesis.
What: RealD (NYSE: RLD) shares jumped 21% Wednesday morning after the company released earnings that beat expectations.
So What: In the fiscal second quarter, RealD reported revenue of $65.3 million, up 68.7% from last year and easily topping expectations of $50.9 million. Higher revenue couldn't swing the company to a profit, though, as net loss was $5.1 million, or $0.12 per share.
Now What: RealD and IMAX (Nasdaq: IMAX) both reported outstanding third-quarter results, showing movie buffs are trading up for the 3-D and big-screen experience. My concern is the negative gross margins for RealD's product segment, which isn't being made up by higher margin licensing revenue yet. I like what RealD is doing in the movie business, but I just can't get too excited about the posting of another loss when competitor IMAX is already solidly profitable.
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Fool contributor Travis Hoium is long shares of IMAX. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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