DG FastChannel Inc. reported quarterly results that surpassed past market expectations, backed by surging adoption of high definition (HD) advertising, sending its shares up 13 percent to a new 52-week high.

DG FastChannel, provides digital media services to the advertising, entertainment and broadcast industries, revealed its fourth-quarter HD advertising revenue to be as $21.4 million, a climb of 78 percent from last year.

Chief Executive Scott Ginsburg posted on a conference call with analysts that the company hopes the adoption curve for HD advertising to continue to rise, and witnesses HD revenues and deliveries to improve throughout the year.

DG FastChannel, which reported fourth-quarter gross profit margin of 67 percent, increased from 59 percent last year, witnesses better incremental margins on HD than in its core business, Malloy claimed.

"It's just a natural progression to higher quality signals for programming and ads", he added.

Currently, HD advertising is reported to be only 7 percent of volumes for DG FastChannel, however, about 37 percent of revenue, and this could increase to 40 to 50 percent in the next three years, Merriman Curhan Ford & Co analyst Richard Fetyko said.