Tuesday's Early Winners & Losers: RealNetworks

The digital media company beats Street estimates.
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Herbalife

(HLF) - Get Report

gained after the Cayman Islands-based company beat Wall Street's third-quarter earnings expectations.

The company, which sells weight-management and personal care products, posted net income of $26.5 million, or 36 cents a share, compared with $27.1 million, or 37 cents a share a year ago. Excluding items, the company reported earnings of $38.1 million, or 51 cents a share. Sales increased 18.8% to $476.4 million. Wall Street was looking for earnings of 46 cents a share on revenue of $470 million.

Looking ahead, the company said it expects fourth-quarter earnings of 52 to 55 cents a share, while analysts are looking for earnings of 52 cents a share. For the full year, the company raised its guidance to $2 to $2.03 a share, excluding items, up from earlier guidance of $1.90 to $1.96. Wall Street is looking for earnings of $1.95 a share. For 2007, Herablife said it expects net sales growth to be in the range of 10% to 15%, and earnings in the range of $2.40 to $2.47 a share. Analysts are looking for earnings of $2.33. Shares were trading up $2.30, or 6%, to $40.55.

RealNetworks

(RNWK) - Get Report

gained after the the Seattle-based digital media company beat Wall Street's third-quarter expectations. The company posted net income of $42.2 million, or 24 cents a share for the third quarter, up from $11.2 million, or 6 cents a share, a year ago.

Revenue for the quarter totaled $93.7 million, rising from $82.2 million in the same period a year ago. Analysts were looking for the company to earn 22 cents a share on sales of $92.7 million. Excluding items, the company earned $8.7 million, or 5 cents a share, compared with $6.3 million, or 3 cents a share in the year-ago quarter. Looking ahead to the fourth quarter, RealNetworks said it expects net income to range from 18 cents to 21 cents a share. Adjusted net income will be flat to 3 cents. Revenue is expected to range between $117 million and $123 million, including $22 million to $24 million from two months of WiderThan sales.

For the full year 2006, the company anticipates revenue between $387 million and $393 million, including the WiderThan contribution. The company should post a profit of 77 cents to 80 cents a share, and between 9 cents and 12 cents a share, when adjusted for items.

Pro forma net income for the final quarter and full year's results excludes $2.7 million in charges related to its WiderThan acquisition. Analysts forecast EPS of 22 cents for the fourth quarter on $99.5 million in sales. For the full year, analysts are looking for earnings of 80 cents a share on sales of $368.3 million. Shares were trading up 58 cents, or 5.3%, to $11.45.

NetEase.com

(NTES) - Get Report

gained after the Chinese Internet and online-game services provider posted a rise in third-quarter revenue. The company posted earnings of $39.8 million (314.8 million yuan), or 29 cents per American depositary share, up 22% from a year ago. Excluding noncash, share-based compensation costs, income increased 31.8% over a year ago to $43.1 million, or 31 cents per ADS. Revenue totaled $72.4 million, up 23.6% from a year ago.

In a statement, the company said "our online game revenues, which decreased 3.7% quarter-over-quarter, were impacted in part by expected seasonality in the last month of the quarter. In addition, our revenues from online games were affected by increased competition, particularly from free-to-play games offered by some of our competitors, and in-game protests by certain users of our Fantasy Westward Journey game who mistakenly identified an image in this game as being a Japanese flag." Shares were trading up $2.03, or 12.4%, to $18.35.

Dobson Communications

(DCEL)

gained after the Oklahoma City-based wireless communications services company swung to a third-quarter profit. The company posted earnings of $25.9 million, or 14 cents a share, compared with a loss of $65.9 million, or 45 cents a share, a year ago. The company said net income for the recent quarter included a $7.9 million income tax benefit, while the year-ago quarter included a $66.4 million loss on redemption and repurchases of preferred stock.

Sales increased 6.5% to $336.4 million. Wall Street was looking for earnings of 5 cents a share on revenue of $329.7 million. The company said it reached an agreement in principle to settle a consolidated securities class action pending in the U.S. District Court for the Western District of Oklahoma. The settlement agreement would resolve all pending claims against the company and all named individual defendants, and includes all who purchased the company's publicly traded securities between May 6, 2003 and Aug. 9, 2004. The settlement provides for $3.4 million to be paid to settle claims submitted by class members and the plaintiffs' attorneys' fees. A substantial portion of the settlement amount is covered by insurance. Shares were trading up 21 cents, or 2.7%, to $8.05.

Big 5 Sporting Goods

(BGFV) - Get Report

slipped after the El Segundo, Calif.-based retailer matched third-quarter targets and offered soft fourth-quarter guidance. The company made $7.8 million, or 34 cents a share, for the quarter ended Oct. 1, up from the year-ago $7.2 million, or 32 cents a share.

Revenue rose 8% from a year ago to $223 million, as same-store sales rose 3.8%. Analysts were looking for a 34-cent profit on sales of $223 million. The company said it expects to make 34 to 40 cents a share for the fourth quarter, against a 40-cent Wall Street estimate.

Fourth-quarter earnings guidance, compared to the same period last year, reflects the unfavorable effect of the recording of co-op advertising cost reimbursements from vendors for fiscal 2006 earlier in the year, as well as a significantly lower benefit from inventory cost capitalization than the company experienced in the fourth quarter of fiscal 2005. Shares were falling 40 cents, or 2%, to $23.37.