The 10-second takeaway
For the quarter ended March 23 (Q4), RealD beat expectations on revenues and earnings per share.
Compared to the prior-year quarter, revenue contracted and GAAP earnings per share grew significantly. The profit was a surprise, as analysts had predicted a loss.
Gross margins expanded, operating margins dropped, and net margins expanded.
RealD booked revenue of $50.0 million. The nine analysts polled by S&P Capital IQ anticipated revenue of $45.3 million on the same basis. GAAP reported sales were 14% lower than the prior-year quarter's $58.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.10. The nine earnings estimates compiled by S&P Capital IQ anticipated -$0.08 per share. GAAP EPS of $0.10 for Q4 were 25% higher than the prior-year quarter's $0.08 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 53.7%, 210 basis points better than the prior-year quarter. Operating margin was 6.5%, 350 basis points worse than the prior-year quarter. Net margin was 11.1%, 350 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $72.7 million. On the bottom line, the average EPS estimate is $0.15.
Next year's average estimate for revenue is $288.5 million. The average EPS estimate is $0.44.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 67 members out of 92 rating the stock outperform, and 25 members rating it underperform. Among 19 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 10 give RealD a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on RealD is outperform, with an average price target of $16.75.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.