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RealNetworks Beats Estimates

But the company's guidance disappoints.
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Updated from 4:40 p.m. EST

RealNetworks

(RNWK) - Get RealNetworks, Inc. Report

surpassed Wall Street's fourth-quarter forecast late Wednesday but offered a weak outlook for the current quarter and year ahead.

The Seattle-based media company's stock recently slipped by a penny to $10.66 in after-hours trading.

RealNetworks said fourth-quarter revenue totaled $125.6 million, rising from $83.6 million in the same quarter 2005.

Real posted net income of $39.3 million, or 22 cents a share, falling from $295.6 million, or $1.61 a share, in the same period a year ago. Both results include payments related to the company's antitrust settlement with

Microsoft

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.

Thomson First Call analysts polled pegged Real for 21 cents a share on sales of $120.4 million.

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The company posted an adjusted profit of $9.9 million, or 5 cents a share, vs. a loss of $6.1 million, or 4 cents a share, in the same quarter last year.

Real's online music segment posted $33.6 million in sales, up 21% over the same quarter last year, while its growing games division jumped 52% to $23.9 million. Media software and services posted $30.5 million in sales, 2% better over the same period last year.

Technology products totaled $37.6 million, up 270% but that included $26.7 million in revenue related to the newly-acquired WiderThan, which Real

picked up last fall.

WiderThan also helped Real boost its subscriber numbers. The company counted 22.7 million paid subscribers overall for the quarter, compared to 2.45 million in the third quarter.

"We are pleased to report another year of record revenue and strong profitability," CEO Rob Glaser said in a statement. "In addition to the company's financial achievements, 2006 was a year of important strategic achievements for Real that set us up for our next phase of growth."

Real anticipates sales of $122 million to $126 million for the first quarter. Earnings should be between 16 cents and 18 cents a share, while adjusted earnings will range from 2 cents to 4 cents.

Wall Street pegged the company earnings at 25 cents a share on sales of $133.9 million.

For the full year, Real said revenue will be between $540 million and $560 million, a growth rate of 37% to 42% over 2006. Real will recognize $5 million less in revenue related to the WiderThan acquisition.

Net income for the current year will range from 18 cents a share to 23 cents a share. When adjusted, earnings will range from 19 cents a share to 23 cents a share.

For the full year, Thomson First Call forecast EPS of 40 cents on sales of $572.6 million.