RealNetworks: Revenue in line; Charges pile up

RealNetworks said Tuesday that its fourth quarter revenue will be in line with its expectations, but detailed a bevy of charges.

The company (statement) said its revenue for the fourth quarter will be $151 million to $153 million. However, it will be writing down goodwill and acquired intangible assets.

RealNetworks isn't alone. Any company that made acquisitions at higher valuations is writing off goodwill. In some cases, the goodwill carried on the books eclipsed a company's market capitalization.

Among the charges, which total $227 million to $249 million in the fourth quarter:

• A goodwill writedown of $185 million to $200 million. That charge doesn't hurt RealNetworks cash.
• A restructuring charge of $6 million for layoffs and a plan to separate its games business. RealNetworks, however, said it has no idea when the games business can be separated and has halted spending on the transaction.
• A $20 million write-off for project costs and royalties along with a charge of $16 million to $23 million for deferred tax assets. The latter charge doesn't hurt RealNetworks' cash position.