George Mannes
Updated from Jan. 29
RealNetworks (RNWK Quote - Cramer on RNWK - Stock Picks) slumped 7% Friday after posting a fourth-quarter loss and guiding toward continued red ink. For its fourth quarter ended Dec. 31, the Seattle-based provider of online media posted a loss of $5.3 million, or 3 cents a share. That compares with a year-ago loss of $2.5 million, or 2 cents a share. The latest quarter included a charge for the company's antitrust suit against Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks); excluding those costs, the latest-quarter loss was $3.8 million, or 2 cents a share, which was in line with Wall Street estimates. Sales rose 17% from a year ago to $54 million, which was broadly in line with the $54.9 million consensus. RealNetworks said its gross profit margin slipped to 62% from 64% a year earlier as the company's product mix moved toward the lower-margin, faster-growing consumer side. The company also guided analysts to expect strong revenue and a weak bottom line in the first quarter. RealNetworks forecast revenue of $56 million to $59 million and a loss of 4 cents to 5 cents a share, or 2 cents to 3 cents on a pro forma basis excluding suit costs. Analysts had forecast a penny-a-share loss on revenue of $57 million. RealNetworks also said it expects to return to profitability by the end of 2004, excluding suit costs, as margins should stabilize in future quarters. In early action Friday, the stock slipped 44 cents to $5.70.
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