Earnings: Real Networks Has Weak Q4; Music, Games Are Bright Spots
This story was written by Rory Maher.
Real Networks lowered its fourth quarter expectations about two weeks ago, so today's announcement that that company had a weak quarter was less of a jolt. Total revenue dropped 3 percent to $152.6 million, and EBITDA fell to a loss of $14.5 million. Taking into account one-time impairment charges related to layoffs and deferred project costs, EBITDA was $11.3 million, down from $15.7 million in 2007. Music and games had a strong quarter, but the company was weighed down by losses at the media software and services and technology products and services divisions. Specifically:
Games revenue grew 9 percent.
Music revenue was up 8 percent.
Media software and services was down 11 percent.
Technology products and services decreased 13 percent.
Rhapsody subscribers grew to 775 from 600 in the fourth quarter of 2007.
Radio subscribers fell to 1,225 from 1275 in the fourth quarter of 2007.
The company did not include 2009 guidance in its release, but did say that the first quarter of 2009 would likely be worse than fourth quarter of 2008. Specifically, music revenue would be up, it said, while games revenue would be flat, and the media software and services/technology products and services divisions would continue to decline.
By Rory Maher