RealNetworks 1Q profit tops estimates

RealNetworks (Nasdaq: RNWK) reported Tuesday a first quarter operating profit of $8.8 million, or a nickel a share, on sales of $53.5 million. First Call consensus was expecting a profit of 4 cents a share.

Sales were up 120 percent from the $24.4 million in sales reported in the first quarter a year ago. RealNetworks, which makes streaming media software, broke even on a per share basis in the same quarter a year ago.

In the first quarter, RealNetworks said it reported licensing revenue of $34.1 million with $11 million derived from services. Advertising accounted for the remainder of sales.

Including goodwill and charges related to the $273 million acquisition of Netzip, RealNetworks lost $18.8 million, or 12 cents a share, in the first quarter. The company reported a net loss of $1.1 million in the first quarter a year ago.

In a statement, Rob Glaser, chairman and CEO, said the company has gained traction as infrastructure players installed its RealSystem G2 platform. RealNetworks added 20 million new users in the quarter.

Glaser also said RealNetworks was gaining momentum abroad. The company said 25 percent of its revenue derived from outside North America.

On other metrics, RealNetworks said its Real.com network sent more than 160 million users to partners' content in the first quarter. The Real.com Guide, RealChannels and Live Stations have seen a 40 percent jump in users. The company said RealPlayer now has 115 million registered users and RealJukebox has 30 million unique registered users.

RealNetworks, which also delivered an upside surprise in the fourth quarter, primarily competes with Microsoft (Nasdaq: MSFT).