Earnings: RealNetworks Feels Impact Of Economy; Misses Analyst Expectations
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RealNetworks (NSDQ: RNWK) warned investors last week that it was going to have a dismal Q2, and today it reported revenues of $135.7 million, which fell short of the Thomson Reuters (NSDQ: TRIN) consensus forecast of $139.2 million.
The company’s net loss also widened drastically to $188.3 million, increasing from a loss of $1.3 million in the year-ago period. Included in the loss was a non-cash goodwill impairment charge of $175.6 million (without that, the company’s Q2 adjusted EBITDA was $4.1 million). RealNetworks said many of the factors that contributed to the results are “one-off timing related issues,” which are not expected to impact the business going forward.
| 2Q 2009 | 2Q 2008 | Analysts’ Estimates For 2009 | |
|---|---|---|---|
| EPS | $(1.40) | $(0.01) | |
| Net Income | $(188.3M) | $(1.3M) | N/A |
| Revenue | $135.7M | $152.6M | $139.2M |
Here’s how the company performed in some of its major groups:
—Consumer Products and services: This group includes music, media and games. Revenues fell to $89.5 million from $101.4 million in the year-ago period.
—Technology products and solutions: This includes revenues from RealPlayer Plus and other items. Q2 revenues fell to $46.2 million from $51.3 million in the year-ago period.
—Total music subscribers: In Q2, they totaled 1.8 million down from 2.9 million in the previous quarter, and 2.6 million in the year-ago period. For Rhapsody in particular, subscribers were down to 750,000, from 800,000 in the previous quarter, and up compared to the 600,000 in the year-ago period.
Outlook: RealNetworks is not providing guidance and expects 2009 to continue to be a challenging year for consumer spending, online advertising and corporate infrastructure spending. In Q3, Real expects overall revenue to increase sequentially but to decline year-over-year. Compared with the year-ago third quarter, Real expects Media Software and Services revenue to be flat, and revenue in Music, Games and Technology Products and Solutions to decline.
Posted In: Entertainment, Games, Music, Money, Earnings, Companies, RealNetworks
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