Creative Technology's quarterly revenue gets boost from licensing

The Singapore company's latest quarter earnings are back in the black, bolstered by income from licensing deals and divestment of its UK subsidiary--without which, its revenue would be lower than the previous year's.
Written by Liau Yun Qing, Contributor

After its 17th consecutive quarterly loss, Creative Technology is finally back in the black, mainly due to income from licensing deals and divestment of its UK subsidiary.

Creative Technology is back in black due to licensing income from Intel.

In a statement on Wednesday, the Singapore tech company said that it recorded a net profit of US$38.1 million for the quarter ended December 31, 2012, up from a net loss of US$33.9 million in the same quarter in 2011.

It noted that the improvement in net results was primarily due to the US$20 million licensing income from Intel, and gains in the form of its divestment of its wholly-owned UK subsidiary ZiiLABS.

Licensing income seemed to be Creative's only saving grace. Without the US$20 million licensing income from Intel, revenue for the second quarter would have dipped 24 percent year-on-year at US$45.6 million, Creative said.

Creative noted in its prospects that the upcoming quarter will be challenging, and it did not expect any major improvement in the "difficult and uncertain market conditions." It added that it's revenue will be lower and will report an operating loss.

Prior to its latest results, Creative saw 17 consecutive quarters of net losses. In a ZDNet report published in June, CEO Sim Wong Hoo said that the company planned to simplify its product lines to audio and tablet in order to avoid spreading itself too thin. Similarly, analysts told ZDNet in February 2012 that Creative needed to focus on niche markets for recovery.

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