A processing device and method for processing packets of encoded real-time data to perform a gradual fade-out and fade-in of a signal. Upon detecting the beginning of a packet loss period, a last correctly received packet is repeated with gradually increased attenuation to slowly fade out, for example, an audio signal. At the end of the packet loss period, the device slowly fades in the signal by attenuating the first or a number of packets received following the loss period. The method may be performed with low complexity by decrementing segment numbers of samples of data packets such as in a lookup operation.