To: Voltaire who wrote (14894 ) 4/18/2000 7:13:00 PM From: stockman_scott Respond to of 35685
UPDATE 2-RealNetworks posts profit that beats estimates By Scott Hillis SEATTLE, April 18 (Reuters) - RealNetworks Inc. (NasdaqNM:RNWK - news) on Tuesday posted first quarter earnings that beat Wall Street expectations as a growing global appetite for audio and video on the Web more than doubled revenues at the Internet media company. Seattle-based RealNetworks said pro forma profits, excluding acquisition costs, for the three months ended March 31 were $8.7 million, or 5 cents a share, compared to a loss of $526,000, or nil cents a share, a year earlier. Revenues rose 120 percent to $53.5 million from $24.4 million, the company said. The company, which says its popular RealPlayer software is used by 115 million people, had been expected to earn 4 cents a share, according to consensus analyst estimates compiled by First Call/Thomson Financial. Counting expenses stemming from its $273 million takeover of NetZip Inc. announced earlier, RealNetworks said it lost $18.8 million, or 12 cents a share, compared with a loss of 1 cent a share a year earlier, when it had other acquisition-related costs. Shares in RealNetworks rose 7-5/16, or 21 percent, to finish at 41-5/16 in trading on the Nasdaq on Tuesday, before the company announced its earnings. But the stock fell in after-hours trading to about 39-1/4. RealPlayer is widely used to watch video on the Internet, while another product, RealJukebox, is one of the most popular programmes for recording and playing CDs on a computer or downloading music from the Internet. RealNetworks also sells software and services to enable Web sites to run its media technology, dubbed G2, to stream video and sound to people's PCs. It is also beefing up its own Web sites that highlight and promote content using the technology. Sales of software accounted for $34 million of revenues, with services such as software maintenance pulled in another $11 million and advertising ringing up $8.4 million, the company said. ``Our content and infrastructure partners continued to deepen their deployment of the RealSystem G2 platform, making it the most widely deployed media delivery system in the world,' Chief Executive Rob Glaser said in a statement. Glaser also said the company rapidly expanded its presence overseas in the quarter, with nearly one-quarter of its revenues coming from outside North America. Some 30 percent of RealPlayer users and 20 percent of Jukebox users were outside North America, which Chief Operating Officer Tom Frank attributed in part to the launching of several foreign-language versions of its software. ``I think that what we're seeing is that it's very much falling in line with our expectations with how the various markets are emerging,' Frank told Reuters in an interview. ``The reality is that we continue to build out a huge number of partnerships across the board in terms of extending the platform and in terms of playback opportunities,' Frank said. ``The momentum is firing on all cylinders really in exactly the way we had hoped.' RealNetworks, facing increased competition from cross-town rival Microsoft Corp. (NasdaqNM:MSFT - news), also stepped up marketing efforts, more than doubling sales and marketing spending to $22.6 million. It also boosted research and development spending by 50 percent, to $11.6 million. Frank and Glaser, a former Microsoft executive, brushed off concerns that Microsoft, with new versions of its media player technology now built into its Windows operating system, posed a major threat to RealNetwork's market-leader position. ``Microsoft has been claiming that they are making aggressive moves against Real for four years,' Frank said. ``If you look back through the archives, every time you saw a headline saying that Microsoft is coming after Real, it would go back four years,' Frank said. "To date our business has continued to grow and thrive.">>