| Thu, May 07, 2009 |
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Earnings: RealNetworks Hit By Currency Exchange Rates, Legal Fees; Verizon Boosts Music Revenues
RealNetworks (NSDQ: RNWK) said today that its first-quarter financial results were heavily affected by currency exchange rates, resulting in a five percent decrease in revenues compared to the year-ago period, and a net loss, compared to a profit in the first quarter a year earlier. Excluding the effects of these foreign exchange rate changes, revenue grew 1 percent year-over-year. The company’s current litigation over its Real DVD product is also contributing to its net loss.
One bright spot was music revenues, which increased 16 percent to $44.1 million from the year ago period. In an interview, RealNetwork’s CEO Rob Glaser (pictured, right) said growth is occurring on the subscription side, and mostly as a result of the new relationship it has with Verizon (NYSE: VZ) Wireless. “The work we do with them is the single-biggest part of that. We are nine months into that and that’s still working well.” He said they’ve jumped from 600,000 to 800,000 music subscribers and “Verizon is the single biggest difference.”
Glaser said the company is not providing a detailed financial forecast for the year because they remain cautious on the economic environment. Glaser: “I would say the phrase ‘shoots of green,’ is fair…We are seeing some for sure, but we aren’t in the business of speculating on when the recession will end. We are viewing the environment as one in which there is less panic or fear and people are rolling up the sleeves and saying ‘what do we do moving forward.’”
Release | Earnings call (2 p.m. PST).
Financial performance: For the first quarter of 2009, revenue was $140.8 million, a decrease of 5 percent, compared with $147.6 million in the first quarter of 2008. Music revenues jumped 16 percent; game revenues increased 3 percent; technology products and solutions revenues (mostly the wireless division) dropped 15 percent to $43.6 million and media software and services (including RealPlayer) dropped 23 percent to $20.3 million. The company reported a net loss of $12.1 million, or 10 cents a share, compared with net income of $2.4 million, or 2 cents a in the first quarter of 2008.
Net loss: One of the contributing factors to the company’s quarterly loss is fees associated with its current DVD litigation. The Real DVD program had expenses of $6 million during the quarter, and legal fees represented a portion of that.
Real DVD: Closing arguments in Real’s DVD litigation, regarding are set to occur this week, Glaser said. As part of the litigation, he said they demonstrated a product that has not yet been announced. It is similar to a DVD player that would also act as a hard drive and allow consumers to save DVDs that they have purchased.
Outlook: In Q2, Real expects overall revenue to decline year-over-year and to be flat to slightly down sequentially. Compared with the year-ago second quarter, the company expects second-quarter Music revenue to increase, and revenue in Games, Media Software and Services and Technology Products and Solutions to decline.
New board member: RealNetworks also announced that John Chapple has been appointed to the company’s board of directors. Chapple was previously CEO and Chairman at Nextel Partners. He also sits on the boards of Yahoo! (NSDQ: YHOO) and Cbeyond. Chapple replaces Jeremy Jaech, who previously announced he would not be running for a new term.
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paidContent.org
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Earnings: RealNetworks Hit By Currency Exchange Rates, Legal Fees; Verizon Boosts Music Revenues
RealNetworks (NSDQ: RNWK) said today that its first-quarter financial results were heavily affected by currency exchange rates, resulting in a five percent decrease in revenues compared to the year-ago period, and a net loss, compared to a profit in the first quarter a year earlier. Excluding the effects of these foreign exchange rate changes, revenue grew 1 percent year-over-year. The company’s current litigation over its Real DVD product is also contributing to its net loss.
One bright spot was music revenues, which increased 16 percent to $44.1 million from the year ago period. In an interview, RealNetwork’s CEO Rob Glaser (pictured, right) said growth is occurring on the subscription side, and mostly as a result of the new relationship it has with Verizon (NYSE: VZ) Wireless. “The work we do with them is the single-biggest part of that. We are nine months into that and that’s still working well.” He said they’ve jumped from 600,000 to 800,000 music subscribers and “Verizon is the single biggest difference.”
Glaser said the company is not providing a detailed financial forecast for the year because they remain cautious on the economic environment. Glaser: “I would say the phrase ‘shoots of green,’ is fair…We are seeing some for sure, but we aren’t in the business of speculating on when the recession will end. We are viewing the environment as one in which there is less panic or fear and people are rolling up the sleeves and saying ‘what do we do moving forward.’”
Release. Earnings call (2 p.m. PST).
Financial performance: For the first quarter of 2009, revenue was $140.8 million, a decrease of 5 percent, compared with $147.6 million in the first quarter of 2008. Music revenues jumped 16 percent; game revenues increased 3 percent; technology products and solutions revenues (mostly the wireless division) dropped 15 percent to $43.6 million and media software and services (including RealPlayer) dropped 23 percent to $20.3 million. The company reported a net loss of $12.1 million, or 10 cents a share, compared with net income of $2.4 million, or 2 cents a in the first quarter of 2008.
Net loss: One of the contributing factors to the company’s quarterly loss is fees associated with its current DVD litigation. The Real DVD program had expenses of $6 million during the quarter, and legal fees represented a portion of that.
Real DVD: Closing arguments in Real’s DVD litigation, regarding are set to occur this week, Glaser said. As part of the litigation, he said they demonstrated a product that has not yet been announced. It is similar to a DVD player that would also act as a hard drive and allow consumers to save DVDs that they have purchased.
Outlook: In Q2, Real expects overall revenue to decline year-over-year and to be flat to slightly down sequentially. Compared with the year-ago second quarter, the company expects second-quarter Music revenue to increase, and revenue in Games, Media Software and Services and Technology Products and Solutions to decline.
New board member: RealNetworks also announced that John Chapple has been appointed to the company’s board of directors. Chapple was previously CEO and Chairman at Nextel Partners. He also sits on the boards of Yahoo! (NSDQ: YHOO) and Cbeyond. Chapple replaces Jeremy Jaech, who previously announced he would not be running for a new term.
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paidContent.org
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Earnings: RealNetworks Hit By Currency Exchange Rates, Legal Fees; Verizon Boosts Music Revenues
RealNetworks (NSDQ: RNWK) said today that its first-quarter financial results were heavily affected by currency exchange rates, resulting in a five percent decrease in revenues compared to the year-ago period, and a net loss, compared to a profit in the first quarter a year earlier. Excluding the effects of these foreign exchange rate changes, revenue grew 1 percent year-over-year. The company’s current litigation over its Real DVD product is also contributing to its net loss.
One bright spot was music revenues, which increased 16 percent to $44.1 million from the year ago period. In an interview, RealNetwork’s CEO Rob Glaser said growth is occurring on the subscription side, and mostly as a result of the new relationship it has with Verizon (NYSE: VZ) Wireless. “The work we do with them is the single-biggest part of that. We are nine months into that and that’s still working well.” He said they’ve jumped from 600,000 to 800,000 music subscribers and “Verizon is the single biggest difference.”
Glaser said the company is not providing a detailed financial forecast for the year because they remain cautious on the economic environment. Glaser: “I would say the phrase ‘shoots of green,’ is fair…We are seeing some for sure, but we aren’t in the business of speculating on when the recession will end. We are viewing the environment as one in which there is less panic or fear and people are rolling up the sleeves and saying ‘what do we do moving forward.’”
Release. Earnings call (2 p.m. PST).
Financial performance: For the first quarter of 2009, revenue was $140.8 million, a decrease of 5 percent, compared with $147.6 million in the first quarter of 2008. Music revenues jumped 16 percent; game revenues increased 3 percent; technology products and solutions revenues (mostly the wireless division) dropped 15 percent to $43.6 million and media software and services (including RealPlayer) dropped 23 percent to $20.3 million. The company reported a net loss of $12.1 million, or 10 cents a share, compared with net income of $2.4 million, or 2 cents a in the first quarter of 2008.
Net loss: One of the contributing factors to the company’s quarterly loss is fees associated with its current DVD litigation. The Real DVD program had expenses of $6 million during the quarter, and legal fees represented a portion of that.
Real DVD: Closing arguments in Real’s DVD litigation, regarding are set to occur this week, Glaser said. As part of the litigation, he said they demonstrated a product that has not yet been announced. It is similar to a DVD player that would also act as a hard drive and allow consumers to save DVDs that they have purchased.
Outlook: In Q2, Real expects overall revenue to decline year-over-year and to be flat to slightly down sequentially. Compared with the year-ago second quarter, the company expects second-quarter Music revenue to increase, and revenue in Games, Media Software and Services and Technology Products and Solutions to decline.
New board member: RealNetworks also announced that John Chapple has been appointed to the company’s board of directors. Chapple was previously CEO and Chairman at Nextel Partners. He also sits on the boards of Yahoo! (NSDQ: YHOO) and Cbeyond. Chapple replaces Jeremy Jaech, who previously announced he would not be running for a new term.
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paidContent.org
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| Tue, May 05, 2009 |
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RealNetworks Postpones Shareholder Meeting; Still Noodling Option Plan
RealNetworks (NSDQ: RNWK) is having some trouble coming up with an stock-option plan that shareholders, too, can live with. In an SEC filing issued today, the company said it had postponed its annual shareholder’s meeting to come up with an option-exchange program that won’t dilute shareholders too much. Companies typically explore options-exchange programs when their stock price has decreased to the point where many of the options held by employees are worthless. The program enables employees to exchange those options for options with lower exercise prices (making them worth something again). Of course, shareholders are wary of these programs since it means issuing more stock if the new options are exercised, which decreases the value of their’ holdings.
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paidContent.org
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Microsoft Might Not Go Ahead With Hearing In European Antitrust Case
Microsoft (NSDQ: MSFT) has asked for the chance to defend itself early next month in front of the European Commission on charges its bundling of Internet Explorer with Windows violated European antitrust law but the company might not take up the opportunity. The company tells paidContent it only requested the hearing in order to preserve its right to one and actually hasn’t decided whether to go through with it. The company filed a written response to the charges last week.
The European Commission was certainly not swayed by Microsoft’s arguments during a similar hearing six years ago—and the company’s chances this time around are not looking much better. In January, the European Commission said its preliminary view was that Microsoft had stifled competition in the browser market by packaging Internet Explorer and Windows. Google (NSDQ: GOOG) and Mozilla have since said that they support the European Commission’s preliminary findings. And earlier this month, a host of other tech companies, including IBM, Adobe (NSDQ: ADBE), and RealNetworks (NSDQ: RNWK), represented by the European Committee for Interoperable Systems, also joined as third parties in the case.
At stake for Microsoft: “a significant fine based on worldwide sales of Windows operating systems,” according to the company’s most recent quarterly filing. Microsoft has also said that the European Commission wants the company and computer makers to let users choose a specific browser when they buy a new PC even though many Europeans are already forgoing Internet Explorer. The Internet Institute puts Internet Explorer’s market share at 58.1 percent in Europe in January, below its market share in the United States.
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