RealNetworks posts drop in profit, lowers forecast

Digital media company RealNetworks Inc. posted lower quarterly profit Wednesday on sharply reduced proceeds from a legal settlement with Microsoft Corp. and forecast full-year results below expectations.

Fourth-quarter net income was $39.3 million, or 22 cents a share, compared with $295.6 million, or $1.61, a year earlier.

Both quarters included proceeds from the settlement of litigation against Microsoft and commercial agreements with the software giant, but it was a far smaller amount in the most recent period compared with the payout of more than $400 million a year earlier, according to analysts.

Revenue rose to $125.6 million from $83.6 million. Excluding items, income totaled $9.9 million, or 5 cents a share, compared with a loss of $6.1 million, or 4 cents, a year earlier. Analysts, on average, expected net income of 21 cents a share on revenue of $120.4 million for the fourth quarter, according to Reuters Estimates.

For full-year 2007, RealNetworks forecast revenue in the range of $540 million to $560 million, and net income of 18 cents to 23 cents a share. Analysts, on average, had expected 40 cents a share on revenue of $572 million, according to Reuters Estimates.

For the first quarter, RealNetworks sees revenue of $122 million to $126 million and net income of 16 cents to 18 cents. Analysts, on average, expected first-quarter earnings of 25 cents a share on revenue of $133.9 million, according to Reuters Estimates.