You can tell a lot about a company by listening in on its conference calls, especially after a disappointing earnings report. Case in point: Creative Technology (NASDAQ:CREAF), which badly missed expectations, but spent very little time, in the report or on the call, dwelling on actual financial results.

So let's get those numbers out right now. Sales dropped 14% from last year, to $241.5 million, and the year-ago profit of $691,000 turned into $21 million of red ink. Gross margins of 15% are not conducive to any kind of profits -- even Wal-Mart (NYSE:WMT) or Dell (NASDAQ:DELL) would make a net loss from that kind of disadvantaged starting point.

Creative spokesman Craig McHugh spent much of the call extolling the virtues of the firm's latest and greatest gadgets, but he did mention that Creative is targeting 20% gross margins for the current quarter, thanks to encouraging sales of high-margin flash-based digital audio and video players. Still, this is a very low-margin company that can't afford to take a whole lot of risks. And it's tough to be a market leader if you never take any chances.

McHugh delved into great detail on the settlement with Apple Computer (NASDAQ:AAPL) over the "Zen patent" lawsuit, which is giving Creative some freedom to move in the short term. Not only has it received settlement payment in full from Apple, to the tune of $100 million, but Creative can now make and sell iPod accessories with Apple's blessing. The company is in talks with other makers of media players to work out licensing deals for that patent. Targets haven't been disclosed, but likely discussion partners include Samsung, Micron (NYSE:MU), and SanDisk (NASDAQ:SNDK), all of which market successful media players with some resemblance to the patent-protected Zen interface.

Those new revenue streams could -- should, really -- add up to significant improvements, and Creative hopes to become profitable as early as this quarter, even without the Apple payment. There's a lot riding on that one user interface patent now, and the company would be quite lost without it. The stock isn't what I'd call a screaming bargain or a golden goose, but it does look a lot more appetizing today than at the end of the last quarter. Maybe next time, management might want to talk about the numbers a bit.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolishdisclosureis always worth a read.