Listen up, Dolby Laboratories (DLB 1.04%) investors, because your favorite audio specialist just reported fiscal third-quarter 2015 results. And though Dolby's top line doesn't look particularly impressive at first glance, its earnings should be music to investors' ears.

Quarterly revenue climbed 3.7% year over year to $231.7 million, which translated to a 5.3% decline in adjusted net income to $51.4 million, or $0.49 per diluted share. Analysts, on average, were expecting slightly higher revenue of $235.3 million, and significantly lower earnings of $0.30 per share.

"Despite signs of near-term weakness in consumer markets," explained Dolby CEO Kevin Yeaman, "our core business remains strong and our growth initiatives continue to advance."

Digging deeper
Yeaman also noted the first five Dolby Cinema locations in the U.S. opened this quarter "and have been met with spectacular audience and industry reactions."

For reference, back in April, Dolby announced two massive new votes of theatrical confidence from AMC Entertainment and Disney. AMC, for its part, promised to complete at least four full installations of Dolby Cinema at AMC Prime theaters by the middle of May. And Disney pledged to provide plenty of Dolby Cinema content for moviegoers to enjoy, starting with the launch of Tomorrowland in May, and continuing with the release of Disney Pixar's Inside Out in June. 

Licensing revenue remained at Dolby's core, falling a modest 0.3% year over year to $204.9 million. Within that, Broadcast again comprised the lion's share at around 46% of total licensing, with broadcast revenue up 7% year over year to roughly $94.3 million.

Next, PC revenue was roughly 18% of total licensing at approximately $36.9 million, down about 4% year over year primarily because of continued declines in PC market volume.

In addition, Consumer Electronics licensing was about 11% of Dolby's total at $22.5 million, down about 20% year over year. According to management, that result was "driven by lower volumes in a variety of products" including Blu-ray and DVD players.

Next -- and without much new elaboration in the call -- Dolby said Mobile devices stood at 13% of total licensing at roughly $26.6 million, up slightly on a year-over-year basis. For now, it seems Dolby investors will need to continue waiting for updates on the company's possible reentry into Samsung's smartphone ecosystem. Recall early last year after Dolby Digital was notably excluded in the Galaxy S5, Dolby CFO Lewis Chew told investors his company was "working through our arrangements with Samsung regarding our mobile technologies."

Last but not least, licensing revenue from "Other" markets stood at roughly 12% of the total at $24.6 million, down 3% year over year. This segment includes many early stage products such as Dolby Voice, and Via, Dolby's subsidiary licensing service for third-party intellectual-property owners.

Outside of licensing, revenue from Products and Services totaled $26.8 million during the quarter, compared with $17.7 million in the same year-ago period. The growth was driven almost entirely by sales of products from Doremi Labs, which Dolby acquired this past November.

Listening forward
For the current quarter, Dolby expects revenue will range from $230 million to $240 million, with adjusted gross margin remaining steady at between 90% and 91%. That should result in adjusted earnings per share between $0.43 and $0.49. Similar to last quarter, analysts were expecting higher revenue of $244.9 million, but lower earnings of $0.34 per share.

Consequently, for the full fiscal 2015, Dolby now expects revenue of $970 million to $980 million, representing a reduction of $20 million from the top end of the range it provided three months ago. Here again, Wall Street was more optimistic in calling for full-year revenue of $986.3 million.

According to Chew in the subsequent conference call, the narrower range primarily reflects "signs of potential weakness in the economy that we could be seeing in the near term." More specifically, Dolby expects PC licensing to fall 10% year over year as current trends continue to bear out, while Mobile should continue to run at 11% to 13% of licensing, and broadcast should remain roughly flat next quarter on expectations for "softer" consumer demand.

To Dolby's credit, Chew elaborated during the conference call that Dolby repurchased about $16 million in common stock during the quarter, or roughly the same as in prior quarters. But going forward, Dolby plans to increase quarterly buyback activity using the $212 million it still has available under its current repurchase authorization.

Chew also reminded investors of Dolby's recently initiated $0.10-per-share quarterly dividend. With healthy cash flow, no debt, and over $1 billion in cash and equivalents on its balance sheet, Dolby can obviously afford to fund both value-creating initiatives for the foreseeable future.  

In the end, Dolby obviously still has work to do to capitalize on its early growth opportunities, especially in mobile devices and the cinema. But one way or the other -- and as long as Dolby's core licensing business keeps holding its ground -- it seems evident Dolby intends to continue rewarding long-term shareholders for their patience.