Sonic Solutions says 4Q revenues will be down
Sonic Solutions (Nasdaq: SNIC) announced preliminary revenues of $38.1 million for the fourth quarter, down from $40.4 million a year earlier. The company declined to announce specific profit numbers on the call, but CEO David Habiger confirmed the company was in the black.
The digital media software developer announced preliminary results for the fourth quarter ended March 31, 2007, on a conference call after the close of trading.
“We were profitable this quarter,” Habiger said. “We improved the cost structure and doubled the workforce in China.”
For the first quarter ending June 30, the company forecast revenues of between $33 and $35 million, compared with $36.8 million a year earlier. Analysts surveyed by Reuters were expecting revenue of $38.4 million for the fourth quarter and $36.4 million for the first quarter.
Sonic Solutions is betting its success on the adoption of mobile phone multimedia and the HD and Blu-ray movie formats, Habiger said. Of the 1.3 billion phones sold this year, 600 million will have multimedia capabilities, he said.
“Sonic is playing a key role in bringing the HD format to the market both on the consumer and producer sides,” Habiger said. “The Roxio Mobile Media Manager sows seeds for the future direct sales of Roxio software. Our business model is perfectly positioned to take advantage of the rise of digital media.”
In the fiscal year of 2008, Sonic CFO Clay Leighton said on the call:
• OEM (Original Equipment Manufacturer) sales will grow, but at a less rapid pace than the 15% seen last year by the company.
• Retail sales will be up, but a greater percentage will come from the Web. Leighton forecast a 14% to 20% decline in bricks-and-mortar sales.
• There will be a modest increase in professional revenues.
• There will only be a 2% headcount increase in fiscal year 2008, which will translate to greater operational efficiency.
Sonic Solutions’ stock price has ranged from $13.00 to $19.35 over the last 52 weeks. The company’s stock was down 2% in today’s regular-hours trading to close at $13.37. At 5:37 p.m. ET in after-hours trading, the stock lost 6% to stand at $12.52.
