TechWeb

RealNetworks Swings To A Profit In 3Q

Oct 27, 2005 (03:10 PM EDT)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=172901208


RealNetworks Inc. on Thursday said it swung to a profit in the third quarter, as revenues were boosted, in part, by higher sales in its music and games subscription services.

The Seattle-based company said net income, based on generally accepted accounting principles, increased to $11.2 million, or 6 cents a share, compared to a net loss of $7 million, or 4 cents a share, in the same period a year ago. Revenues rose 20 percent to $82.2 million from $68.3 million a year ago.

The company reported having a total of 2.2 million subscribers to its paid digital media services at the end of the quarter, up from 1.55 million a year ago. The latest number included 1.3 million paid subscribers to it music services.

The company has partnered with wireless carriers Sprint and Cingular Wireless to offer its game and other services over mobile phones.

This month, Microsoft agreed to pay RealNetworks $761 million to settle an antitrust suit. As part of the deal, Microsoft agreed to integrate RealNetwork's music-subscription service, Rhapsody, throughout its MSN properties and its WindowsMedia.com entertainment guide.

"Together with our partners we're continuing to expand our ability to offer digital music, video and games to consumers wherever and whenever they want them," Rob Glaser, chairman and chief executive of RealNetworks, said in a statement.

In its consumer segment, which includes music and games, RealNetworks reported a 28 percent increase in revenues to $71.8 million from $56 million a year ago. Music revenues increased 39 percent to $25 million, and games were up 62 percent to $14.7 million.

In the fourth quarter, RealNetworks expects revenues between $81 million and $85 million. The company does not expect to see any material impact in the quarter from the Microsoft deal. For the full year, the company expects revenue to be between $322.5 million and $326.5 million, with earnings per share between $1.51 and $1.57.