RealD Effort To Talk Up 3D Leaves Investors Cold As Stock Falls In After Hours Trading

UPDATE, 3:30 PM: Things were fine for RealD, until executives started talking. The company’s stock price initially jumped in after-hours trading following a surprisingly strong earnings report. That would be a welcome change for the company whose stock value has dropped more than 29% since mid-May. But investor sentiment quickly changed about mid-way through CEO Michael Lewis’ briefing where he scoffed at the notion that consumers are fed up with paying higher ticket prices for 3D. The stock price fell to 7.4% below Thursday’s $24.07 closing price. “I don’t think that two films a trend makes,” Lewis said referring specifically to the disappointing 3D sales for Disney’s Pirates Of The Caribbean: On Stranger Tides and DreamWorks Animation’s Kung Fu Panda 2. “I don’t see a trend. It’s a trend until the trend changes to something else.” He added that results for 3D films this year “will be all over the place, but the end result will be a good one.” RealD is especially optimistic about the performance of its screens outside the U.S. The international venues account for 49% of RealD’s locations, but 55% of its gross revenues. Lewis didn’t directly answer a question about whether weakening 3D sales in the U.S. might be an early warning of what will happen overseas.

Executives also talked up a new licensing agreement with Samsung that will use RealD’s technology for 3D TV. Although shipments of those sets will begin later this year, the company says that 2012 will be the “tipping point” for sales — especially during the year-end holiday season.

PREVIOUS, 1:40 PM: Analysts fear that audiences are tiring of 3D movies, but you won’t see evidence of that in RealD’s latest earnings. The 3D movie technology company beat profit estimates for the quarter that ended in March, RealD’s fiscal fourth quarter. It generated a net profit of $4.5 million, up from a $20.9 million loss in the same period last year, on revenues of $58.5 million, up 5.6%. That translates into 8 cents of earnings per share, defying the consensus among analysts that the company would have a 15 cent loss. CEO Michael Lewis says that the strong results came “despite challenging box office comparisons” vs early 2010. He adds that he’s optimistic about the rest of this year as the total number of screens capable of handling RealD’s 3D films has grown to 15,000, up from 11,300 at the end of December. “Our significant increase in RealD-enabled screens, particularly in international markets, will enable a larger audience around the world to enjoy RealD’s distinctive and immersive 3D visual experience,” he says. But analysts still may pose tough questions about 3D’s prospects when he talks to them tonight. More to come.