UPDATE 1-DivX quarterly earnings fall; Q1 view disappoints

(Recasts, adds details, share movement)

March 11 (Reuters) - DivX Inc (DIVX.O), a maker of video compression software, reported a 50 percent drop in quarterly profit, hurt by higher expenses, and forecast first-quarter earnings below analysts' expectations, sending shares down about 25 percent in after-hours trading.

The San Diego-based company reported a net income of $3.7 million, or 11 cents a share, compared with $7.4 million, or 21 cents a share, a year ago.

Revenue rose 47 percent to $24.5 million.

Excluding stock-option expenses, operating costs related to its online video-hosting service Stage6, and other items, the company earned 16 cents a share for the quarter.

For the fourth quarter, analysts on average had expected earnings of 14 cents a share, before special items, on revenue of $22.6 million, according to Reuters Estimates.

Operating expenses more than doubled to $25.8 million, primarily due to significant rise in selling, general and administrative expenses.

For the first quarter, the company forecast a loss of 1 cent to a profit of 1 cent a share, on revenue of $24.5 million to $25.5 million. Excluding items, it expects earnings of 13 cents to $15 cents a share.

Analysts on average were expecting the company to earn 19 cents a share, before items, on revenue of $26.2 million.

Shares of the company were trading down $2.42 at $7.77 in trading after the bell on Nasdaq. They closed at $10.19 Tuesday. (Reporting by Bijoy Koyitty in Bangalore; Editing by Gopakumar Warrier)