For RealNetworks, its October 2005 settlement with Microsoft is the gift that keeps on giving.

The digital media firm and operator of the Rhapsody digital music subscription service reported a surge in second-quarter profit today, bolstered largely by another piece of Microsoft's $761 million in payments to settle Real's December 2003 claim that Microsoft illegally forced Windows users to use Microsoft's digital media player.

For the quarter that ended June 30, RealNetworks reported a profit of $38.9 million, or 22 cents a share, up from $4.7 million, or 3 cents, for the same period a year ago. Including those payments, Wall Street analysts had expected a net income of 22 cents per share, according to a survey from Thomson First Call.

But it wasn't all settlement payments that drove Real's profit, as the company saw growth in both its music and game businesses. Excluding the Microsoft payments, Real reported a profit of $4.8 million, or 3 cents per diluted share, up from $1.8 million, or 1 cent per diluted share during the same quarter of 2005.

"We are pleased to report another quarter of continued growth and record revenue," RealNetworks CEO Rob Glaser said in a statement. "Our casual games business continues to be our fastest growth business, posting a 55 percent increase in revenue over the second quarter of last year."

The company's total sales rose 8 percent to $89.4 million, up from $82.7 million in the year-ago quarter.

Music revenue, which includes Rhapsody, represented the largest chunk of that revenue at $30.1 million, a 21 percent jump from the same period a year ago. Software and services revenue was second at $26.1 million, with games third at $21.2 million. Games revenue jumped 55 percent from the same quarter last year.

For the current quarter, Real is projecting sales of $91 million to $94 million and profit of 20 to 22 cents per share, slightly lower than Wall Street expectations of $95 million.

In after-hours trading, shares of RealNetworks were trading down 30 cents, or 3 percent, at $9.51.