No wonder RealNetworks is taking dramatic steps to reorganize: Sales are down, and are expected to decline further in the next quarter.
Real reported that it lost $13.3 million, or 11 cents per share, on sales of $145.5 million in Q4. During the full year, it lost $212.3 million, or $1.60 per share, on sales of $562.3 million.
Sales were a little better than the $143 million that analysts expected and the EPS is par with the 6-cent forecast after factoring in a 5 cents per share restructuring charge. In after-hours trading since the numbers were released, RNWK iss down 2 percent.
“The severe recession in 2009 hurt both our revenue and profitability for the year,” Chief Executive Bob Kimball said in the release. “While we don’t expect that overall trend to change in the first quarter, we are aggressively moving to transform RealNetworks into a more simple and focused company that delivers value to its shareholders. The first step in Real’s simplification was announced this week with the separation of our Rhapsody music business into an independent company.”
For the first quarter of 2010, Real expects overall revenue to decline by up to 12% year-over-year and up to 15% sequentially. As a result of the decline in revenue, Real expects adjusted EBITDA excluding impairments for the first quarter of 2010 to be below the first quarter of 2009. Compared with the year-earlier quarter, the company expects first-quarter revenue for Music, Media Software and Services, Games and Technology Products and Solutions to decline. Sequentially, the company expects revenue to be flat in Games, and to decline in Music, Media Software and Services and Technology Products and Solutions, with the largest decline in Technology Products and Solutions, primarily as a result of fourth quarter business seasonality.