Spyglass Inc has made an unexpected return to profitability with second-quarter net income of $114,000, or $0.01 per share, when Wall Street was looking for a loss of $0.05, according to First Call. In the year-ago quarter, the company posted a loss of $2.5m. The Naperville, Illinois-based browser developer saw revenue climb 25.8% over the prior year’s quarter to $6.3m, as technology licensing revenue rose 47.6% to $4.3m, while services revenue was essentially flat at $2.0m. Revenue also jumped 40% from the prior quarter, with licensing revenue up 128% in the same period.
The profit comes as a welcome relief to Spyglass, which had lost money for seven quarters in a row and last saw a profit in the same quarter two years ago, when it posted earnings of $0.20. The earnings announcement came on the same day that a deal was signed with Sony Corp, which has licensed Spyglass software for use in set-top boxes (see separate story).
The company cites the reversal in fortunes as proof that its shift to the information appliance space was the right move. During the quarter, it signed a $20m three-year deal with Microsoft Corp for joint work on the Windows CE operating system. Deals with several new customers including Sequent Technologies Inc, Tektronix Inc and Toshiba Ltd were also signed during the quarter. Last quarter, a $20m deal was also signed with General Instrument Inc.
For the six-month period, the company posted a net loss of $2.1m on revenue up 16.9% at $10.8m, down from a year-ago loss of $6.2m. The year-ago quarter include an acquisition-related charge of $496,000. Looking ahead, analysts surveyed by First Call are expecting another loss next quarter (-$0.02), before the company sees sustained profitability through the next fiscal year. Separately, Spyglass said that executive vice president of corporate development Michael Tyrrell is stepping down.
