RealD shares fall amid cooling 3-D market

In a sign of slowing 3-D ticket sales, shares in Beverly Hills-based RealD Inc. fell to a new 52-week low on Thursday after the company predicted lower-than-expected revenues in the second fiscal quarter.

Shares in RealD, a leading global supplier of 3-D technology and equipment to cinemas, fell as much as 7.7% on Thursday, dropping to $6.91 in early trading.

In the last three months alone the company’s share price has fallen about 50%, reflecting a slowdown in 3-D ticket sales.

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Thursday’s stock price came a day after the company reported lower than expected box office returns in August of $165 million. Some analysts had estimated the company would pull in $200 million or more in ticket sales for the month.

And September should not bring much improvement, given that only two 3-D movies are coming out this month: “Battle of the Year” and “Cloudy With a Chance of Meatballs 2.”

“We believe overseas consumers are clearly mimicking the increased choosiness for the 3-D format that we began to see with the domestic market back in May,’’ said Eric Wold, an analyst with B. Riley & Co. in a research note.
Wold, who has a buy rating on the stock, lowered his price target from $12.75 from $11, as well as his revenue estimate for the second quarter. He said the company’s new installations in overseas markets should help offset the slowdown in international revenues.

RealD recently signed a deal to supply 3-D equipment to 700 theaters operated by Cinemex, Mexico’s second largest theater chain. The company also has signed several deals with exhibitors in China, where its equipment is available on more than 1,000 screens.

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