RealNetworks’ Sales Drop Nine Percent

RealNetworks (NSDQ: RNWK), which is in the midst of a major reorganization of its business, posted another down quarter, with revenue off nine percent to $128.6 million. The company did however swing to a profit of $3.2 million, or 5 cents a share, compared to a net loss of $12.1 million, or 10 cents a share, during the same period a year ago. The company attributed the turn-around to a gain on the spinoff of its Rhapsody business, as well as a tax benefit.

Sales at its underlying units, however, continue to be weak, with the company saying it expects sales at both its media software and services and its technology products and solutions businesses to fall next quarter. In a release, however, CFO Michael Eggers said he expected the second quarter to be a “low point” and for improvement to begin in the second half of the year as the “effects of our restructuring begin to take hold.”

Interim CEO Robert Kimball said during the company’s earnings call that RealNetworks’ restructuring was “complex” and could not be concluded in a single quarter. He said the company was discontinuing some of its early-stage projects, closing down excess satellite offices, and was now turning its attention to the planned spin off of its games business. Kimball said however that the company’s product pipeline was “not as good” as it would like and so RealNetworks was now also working to change that.