RealNetworks Inc. (RNWK-NASDAQ) posted a 60% rise in earnings with $0.22 EPS on revenues of $129.5 million, but analysts were only expecting $0.17 & $125.3 million.
Real expects next quarter revenue in the range of $130 million to $134 million, GAAPnet income per diluted share of $(0.01) to $0.01 and adjusted netincome per diluted share of $0.04 to $0.06. This guidance assumes aneffective tax rate of approximately 37%. FIRST CALL estimates are$0.00 & $133.6M. For the full year 2007, Real expects revenue inthe range of $547 million to $563 million. Real expects 2007 GAAP netincome per diluted share of $0.24 to $0.27 and adjusted net income perdiluted share of $0.23 to $0.25. FIRST CALL estimates are $0.22 &$550.45M.
The board also approved another $100 million for buybacks after it completed a previous $100 million stock repurchase program in the first quarter of 2007, repurchasing approximately 9.8 million shares for $78.5 million. It has also integrated WiderThan for games innovation and it posted gross margin of 65% (down from 69% year-over-year).
If you look at the EPS for this quarter and the others, just about the entire year EPS is stacked up into this quarter. That is because results include payments related to Real’s antitrust settlement and commercial agreements with Microsoft (MSFT-NASDAQ). Shares closed up almost 1% at $7.59 and shares are up by 6% at $8.05 in atfer-hours trading. The 52-week trading range is $7.42 to $12.08.
As you can tell, this looks like it was the last quarter that the company will be scoring any major settlement payments that drop down straight to make a significant contribution to the bottom line.
Jon C. Ogg
May 2, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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