Pacific Northwest RealNetworks, owner of the Rhapsody online-music service, said fourth-quarter profit fell 93 percent from a year earlier...
RealNetworks, owner of the Rhapsody online-music service, said fourth-quarter profit fell 93 percent from a year earlier when it received payments from an antitrust settlement with Microsoft.
The Seattle company announced after the market closed Thursday that its profit dropped to $2.69 million, or 2 cents a share, from $39.3 million, or 22 cents, in the fourth quarter of 2006. Sales rose 25 percent to $156.9 million.
RealNetworks stock fell 25 cents, or 4.2 percent, to $5.75 in extended trading after it forecast sales for 2008 that were lower than analysts’ estimates.
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The company will have a loss for the year because taxes will rise while it generates half the interest income of the current year, Chief Financial Officer Michael Eggers said in an interview.
Revenue this year will be $612 million to $632 million, the company said.
Analysts estimated sales of $644.3 million on average. RealNetworks will lose 4 to 9 cents a share, compared with analysts’ projections for profit of 11 cents.
Trade group renamed again
WSA, formerly the Washington Software Association, said Thursday it is changing its name to the Washington Technology Industry Association.
The group, the largest state association of tech companies and individuals, has more than 1,000 companies as members.
They represent a wide spectrum of the industry, including software, hardware, digital media, gaming, telecom and corporate IT departments.
Founded in 1984, the association has broadened its focus over the past year, opening a satellite office in Shenzhen, China, and partnering with others in the technology community, such as the Technology Alliance.
“It’s time our name matched our membership,” said Ken Myer, president and CEO.
Chain withdraws public-offering bid
Tully’s Coffee is officially abandoning its bid to go public, citing unfavorable stock market conditions.
The privately held, Seattle-based chain said Thursday it’s withdrawing preliminary paperwork it filed with the Securities and Exchange Commission and will consider other options, including mergers, acquisitions or raising private capital to expand the business.
Tully’s had indefinitely postponed the public offering in August.
Tully’s has about 140 stores in five states and has struggled to turn a profit during its 15 years in business. It posted a net loss of $3.3 million for its second quarter, which ended Sept. 30, deeper than its $2.3 million loss a year earlier.
Stock falls; 787 lag to pinch ’08 results
The stock of Spirit AeroSystems Holdings, a parts supplier for Boeing’s 787 Dreamliner, fell the most since shares began trading in 2006 after fourth-quarter earnings missed estimates and the company said Dreamliner delays may hurt profit this year.
Spirit fell $2.62, or 9.7 percent, to $24.53 Thursday. The stock of the company — which arose from Boeing’s sale of its commercial aircraft-parts operations in Wichita, Kan., in June 2005 — has fallen 21 percent in the past 12 months.
Spirit posted profit of $76 million, or 54 cents a share, short of the 56-cent average estimate by 13 analysts surveyed by Bloomberg, after a year-earlier loss.
The first delivery date for Boeing’s 787 has been postponed to 2009 because of assembly delays. A reduction in 2008 parts deliveries to Boeing “would likely result in lower-than-forecasted revenues and earnings for the year,” Spirit said.
Area IRS offices to help with returns
The Internal Revenue Service Taxpayer Assistance Center in Seattle and in Tacoma will be open this Saturday and next, from 8:30 a.m. to 12:30 p.m., to help with preparing tax returns for people with total income of $40,000 or less and for those eligible for the Earned Income Tax Credit (EITC).
The Seattle center is at 915 Second Ave.; in Tacoma, it’s at 1201 Pacific Ave.
For more information about the EITC and to find out if you qualify, go to www.irs.gov and click on “Can you take credit.”
Nation and World
New jobless claims fall, but not much
The number of newly laid-off workers filing applications for unemployment benefits dropped last week, but not enough to indicate that strains on the labor market are easing.
The Labor Department reported Thursday that 356,000 claims for jobless benefits were filed last week, a decline of 22,000 from the previous week.
The decline only erased a part of the huge jump of 72,000 in claims of the previous week.
The four-week average for jobless claims rose to 335,000, which was the highest level in a month.
Giant homebuilder reports red ink
D.R. Horton, the nation’s largest homebuilder, said Thursday it swung to a loss in its first quarter, due to hefty charges to write off inventory and land values as the housing slump worsens.
Loss for the quarter ended Dec. 31 was $128.8 million, or 41 cents a share, compared with profit of $109.7 million, or 35 cents a share, a year ago.
The results included $245.5 million in pretax charges to write down inventory and the value of land deposits.
Revenue plunged to $1.71 billion from $2.8 billion a year ago.
The builder closed on 6,549 homes, down sharply from 10,202 in the 2007 period.
Profit decelerates on weak car sales
AutoNation, the nation’s largest auto retailer, said Thursday its fourth-quarter earnings fell 31 percent, falling short of Wall Street expectations as drops in California and Florida vehicle sales persisted amid the housing slump.
AutoNation Chief Executive Mike Jackson said he expected U.S. new-vehicle sales to decline to “mid-15 million” vehicles in 2008, compared with total industrywide sales of 16.1 million vehicles in 2007.
But recent interest-rate cuts and a proposed economic-stimulus package could begin helping the industry as early as late 2008, Jackson said.
Shares of AutoNation fell 11 cents to $14.81 after falling as low as $14.06 earlier in the session.
ECB stands fast; Brits cut rate again
The European Central Bank stood firm against the headwinds of global economic turmoil, citing the threat of higher inflation as it declined Thursday to follow the Bank of England’s lead and reduce borrowing costs for its 15-nation region.
But for the first time, the ECB showed signs it might bow to those pressures later this year and join the British central bank and the U.S. Federal Reserve, which have been cutting rates.
The Bank of England lowered its key interest rate a quarter point to 5.25 percent just before the ECB’s decision, making its second cut in three months and cheering retail and business groups who have called for lower rates to restore consumer confidence in the faltering domestic economy.
Compiled from The Associated Press, Bloomberg News and Seattle Times staff