The 10-second takeaway
For the quarter ended Sep. 30 (Q3), RealNetworks met expectations on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly and GAAP loss per share grew.
Margins dropped across the board.
RealNetworks reported revenue of $59.1 million. The one analyst polled by S&P Capital IQ expected a top line of $59.7 million on the same basis. GAAP reported sales were 30% lower than the prior-year quarter's $84.4 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.63. The one earnings estimate compiled by S&P Capital IQ predicted -$0.30 per share. GAAP EPS were -$0.63 for Q3 compared to -$0.15 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 57.3%, 500 basis points worse than the prior-year quarter. Operating margin was -20.7%, 1,710 basis points worse than the prior-year quarter. Net margin was -37.6%, 3,150 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $61.0 million. On the bottom line, the average EPS estimate is -$0.17.
Next year's average estimate for revenue is $252.5 million. The average EPS estimate is $1.02.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 176 members out of 226 rating the stock outperform, and 50 members rating it underperform. Among 52 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 33 give RealNetworks a green thumbs-up, and 19 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on RealNetworks is hold, with an average price target of $10.00.
Internet software and services are being consumed in radically different ways, on new and increasingly mobile devices. Is RealNetworks on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add RealNetworks to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.