Samsung Unpacked: Everything Announced Galaxy Buds 2 Pro Preorder Galaxy Watch 5 Galaxy Z Fold 4 Dell XPS 13 Plus Review Galaxy Z Fold 4 Preorder Apple TV 4K vs. Roku Ultra Galaxy Z Flip 3 Price Cut
Want CNET to notify you of price drops and the latest stories?
No, thank you

Spyglass, MS settle differences

The browser company's shares get a boost from an anticipated $8 million deal with Microsoft.

Browser company Spyglass (SPYG) today saw its stock more than recover from earlier declines after announcing its first-quarter results and an anticipated $8 million from Microsoft for use of its software.

Spyglass shares rose as high as 14 this morning, before closing at 13-1/2--up 1-1/2 points from yesterday. Earlier this month, the stock tumbled on preliminary estimates of a weaker-than-expected quarter.

The rising price was attributed largely to the agreement with Microsoft, which had been at odds with the company over royalties owed for using its Mosaic browser technology in the Internet Explorer browser. Microsoft agreed to purchase all current and future royalties with a one-time cash payment of $7.5 million and $500,000 worth of software and maintenance.

Spyglass will post this revenue in its second quarter. But analysts cautioned that the cash won't last forever.

"It's a nice to have a one-time payment, but that ongoing revenue stream from Microsoft disappears, and now they have to make it up elsewhere," said Jamie Kiggen, an analyst with Cowen & Company. "So their 1997 revenue projections have low visibility...It's dead money for at least a couple of quarters or more."

He added that the company's prospects of being able to achieve analysts' revenue projections are in question because the company is focusing on Internet devices, which are in the early stage.

Meanwhile, the company reported a first-quarter net loss of $1.5 million, or 12 cents a share, for the quarter ending December 31, compared with net profits of $842,000, or 7 cents a share, a year earlier.

The results were in line with analysts' expectations, which were lowered after the company's preliminary first-quarter announcement that it would not likely meet Wall Street's expectations of a loss of 1 cent a share. The stock fell ten percent to 11-1/4 after that announcement.

Revenues for the quarter fell to $3.9 million, down 18.7 percent from a year earlier.