Third quarter revenue rose 14% to $93.7 million.

RealNetworks Inc. on Monday (Nov. 6) reported a sharply higher net profit, boosted by proceeds from the settlement of its antitrust litigation against Microsoft Corp. and commercial agreements with the software giant.

Net income was $42.2 million, or 24 cents per share, compared with $11.2 million, or 6 cents per share, in last year's third quarter.

Third quarter revenue rose 14 percent to $93.7 million from $82.2 million in the year-ago period.

Excluding the Microsoft settlement, stock-based compensation costs equity investment gains and other costs, the company made a profit of $8.7 million, or 5 cents per share.

Those payments from Microsoft will continue through the first quarter of 2007, RealNetworks chief executive Rob Glaser told Reuters on Monday.

In the meantime, the two companies are working together to sell RealNetworks' online music and games, Glaser said.

"With regard to the state of relationship, it is steady," he said. "We are working together well."

Analysts, on average, expected net income of 22 cents per share and revenue of $92.8 million for the third quarter, according to Reuters Estimates.

The company saw a 53 percent increase in revenue from games sales and a 16 percent rise in music revenue over last year's third quarter, while media software and services sales fell 4 percent over the same period.

For the fourth quarter, RealNetworks expects revenue of between $117 million and $123 million, and net earnings of 18 cents to 21 cents per share.

It forecast 2006 revenue of between $387 million and $393 million, with net earnings per share of 77 cents to 80 cents.

Wall Street analysts, on average, had forecast fourth- quarter net earnings of 22 cents per share and revenue of $99.34 million, and full-year earnings of 80 cents on revenue of $368.2 million.

The fourth-quarter and fiscal year forecasts include the effects of RealNetworks' purchase of 95 percent of South Korean mobile music service provider WiderThan Co Ltd.

RealNetworks shares closed 1 cent lower at $10.87 on Nasdaq on Monday.

Questions? Comments? Let us know: @billboardbiz

Print