Real’s Loss Widens as Quarterly Sales Climb
RealNetworks Inc. reported higher quarterly revenue than analysts expected but a wider loss, which company executives blamed on excess office space the company leases in Seattle.
Real, a leading supplier of digital media software and services, said revenue climbed to $49.6 million in the second quarter, up 13% from a year earlier. Reflecting the Seattle company’s shift away from technology sales, about two-thirds of its revenue came from services, with the rest coming mainly from software license fees.
But the loss for the quarter was $9.6 million, or 6 cents a share. The consensus among analysts surveyed by Thomson First Call was 1 cent. Real lost $1.56 million, or 1 cent a share, in last year’s second quarter on revenue of $43.8 million.
Subscription revenue increased, although the number of subscribers remained flat at 1 million -- the first time Real hasn’t reported an increase since it launched the package of audio and video clips in September 2000.
Chief Executive Rob Glaser said the latest total might be deceptively low, however, because of the way the company counts customers who buy Major League Baseball programming.
The company posted $44.3 million in operating expenses, a 17% increase. A $7.1-million charge for office space accounted for most of the increase.
Excluding the real estate charge, the company would have posted a loss of $2.5 million, or about 2 cents a share.
Glaser said the company planned to launch a downloadable music store to complement the subscription service it recently began offering from Listen.com Inc.
The earnings announcement came after Real’s shares closed at $6.86, down 6 cents, on Nasdaq. Shares dropped further in after-hours trading to $6.25.
