Earnings News Frees Liberate, but RealNetworks Disappoints - TheStreet

In the world of interactive media, the news Wednesday evening was good for Liberate Technologies (LBRT) - Get Report, but not real good for RealNetworks (RNWK) - Get Report.

Liberate, which develops software for interactive television, reported a pro forma net loss of $6.9 million, or 7 cents per share, for the second quarter ended Nov. 30. Analysts had expected a loss of 17 cents a share, according to

First Call/Thomson Financial

. Revenue for the quarter rose 93% from a year earlier to $11.7 million, ahead of analysts' consensus estimate of $10.1 million.

The company also raised its financial guidance for the third quarter ending Feb. 28, excluding the impact of special charges.

The company says its installed base of subscribers roughly doubled to 700,000 in the quarter ended Nov. 30. Liberate says it reports revenue only from deployments accompanied by a royalty report. Liberate's shares fell $2.38 to close at $11 on Wednesday, before the company reported its numbers; the stock regained $1.38 of the loss in after-hours trading.

Meanwhile, Internet broadcasting enabler RealNetworks had a more disappointing report on its end of the Internet-broadcasting convergence front. In a preannouncement of its results for the fourth quarter ending Dec. 31, the company said it expects to a report pro forma diluted earnings of 2 cents a share, compared to the First Call consensus of 4 cents. RealNetworks now expects revenue to end up between $58 million to $60 million, well short of the $73.5 million that analysts were awaiting.

Though ads associated with streaming audio and video are seen as a more promising forum for online advertising than the ubiquitous banner ad, the trend didn't pan out for RealNetworks in the quarter. In a conference call, the company said its biggest shortfall in the quarter came in the area of online advertising. In the fourth quarter, the company's ad revenue will amount to about $7 million rather than the $13.5 million RealNetworks had expected. The company blamed lower ad rates and customers with credit problems.

"We are not immune to the current market environment for Internet-related spending," said RealNetworks CEO Rob Glaser in a statement.

The company fell $1.06 to $9.94 in normal trading, then plummeted to $6 in after-hours trading.

RealNetworks says it expects to report full results for the fourth quarter around Jan. 30, 2001.