Thursday, May 7, 2009

RealNetworks Inc. Posts Worst Q1 Loss

. Thursday, May 7, 2009

By stockOzone team

Digital media company RealNetworks Inc (RNWK.O) reported a steeper-than-expected first-quarter loss and said it expected 2009 to remain tough for consumer and ad spending.

The Seattle-based company, which delivers entertainment to personal computers and mobile devices, posted a net loss of $12.1 million or 10 cents per share, compared with a net profit of $2.4 million, or two cents per share, a year earlier.

RealNetworks, whose shares were little changed in after-hours trade, said revenue slipped 5 percent to $140.8 million, in line with expectations. Revenue included a negative impact of $8.7 million from a stronger dollar, it said.

"The results came in below expectations and the second quarter forecast is light," said Piper Jaffray analyst Michael Olson, who has a sell rating on the company.

"From the first take, it looks like growth in the games business, which has been shining star has been decelerating."

Analysts on average had forecast a loss of 6 cents per share on revenues of $140.7 million, according to Reuters Estimates.

For the second quarter of 2009, Real expects overall revenue to decline year-over-year and to be flat to slightly down sequentially.

In an interview, CEO Rob Glaser said the company was using the current business environment to streamline and simplify operations and drive growth into the future.

Glaser said the company spent $6 million in the quarter on its lawsuit against Hollywood studios that have accused it of violating copyright law by selling software that allows people to make backups of their DVDs on a home computer.

Closing arguments are due in coming days in the case in which U.S. District Judge Marilyn Hall Patel is considering a preliminary injunction against RealNetworks.

Disclosure: Author does not own any of the stocks discussed here.





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