SAN FRANCISCO -- Online media provider
reported third-quarter financial results above analysts' expectations, as the company diversified away from music sales.
The operator of the Rhapsody online music service said third-quarter net income fell to $4.3 million, or 3 cents a share, down from $42.2 million, or 24 cents a share, in the same quarter a year ago. The year-ago period included payments related to Real's antitrust settlement and commercial agreements with
, which ended in the first quarter of 2007.
Excluding stock-based compensation and non-operating costs, RealNetworks earned 6 cents a share, topping analysts' consensus estimate of 4 cents, according to Thompson Financial.
Revenue rose 55% to $145 million, edging past analysts' average estimate. Music revenue increased 24% to $38 million.
But sales from the company's technology products and solutions units surged 377% to $53 million, helped by the 2006 acquisition of WiderThan. "In the third quarter we both achieved solid operating results and made great strides strategically," said Chief Executive Rob Glaser in a statement. "Not only did we achieve record revenue, we also increased our adjusted EBITDA by 78% year over year."
For the fourth quarter, RealNetworks forecast earnings of 6 cents to 7 cents a share, excluding items, on revenue of $152 million to $157 million, vs. analysts' average estimate of 6 cents a share on $158 million in revenue.
Shares of Real rose 6 cents in recent after-hours trading to $6.62.