Gemstar-TV Guide Posts Wider Loss in 4th Quarter
Gemstar-TV Guide International Inc. on Monday reported a wider fourth-quarter net loss and said it will take a write-down for amortization of goodwill of up to $5 billion in the current quarter.
The company, which operates an interactive TV program guide and publishes TV Guide magazine, also announced the resignation of its co-president and co-chief operating officer, Peter Boylan.
Gemstar’s shares fell on the news, dropping by $1.97, or 9.1%, to $19.76 in after-hours trading. The shares had closed up $1.04 at $21.73 on Nasdaq. The stock had fallen 37% over the last year.
Pasadena-based Gemstar- TV Guide posted a net loss of $210.2 million, or 51 cents a share, compared with a loss of $126.1 million, or 31 cents, in the year-earlier period.
Revenue declined 3.3% to $346.4 million. Lower sales at TV Guide amid an advertising slowdown offset rising revenue at the company’s technology division, which makes software to run on-screen television program guides.
Excluding depreciation and the amortization of goodwill, Gemstar said it had a profit of $118.6 million, or 27 cents a share, down 5.6% from $112.3 million, or 25 cents, in the year-earlier fourth quarter.
The results surpassed by 2 cents the average estimate of analysts surveyed by Thomson Financial/First Call.
Gemstar had depreciation and amortization expenses of $243.5 million in the recent quarter.
The company said that under new rules regarding the treatment of goodwill, it will write down as much as $5 billion of the $8.6 billion in goodwill it had on its books as of Jan. 1.
That write-down will wipe out more than half of the $9.7 billion in assets the company said it had as of Dec. 31. Most of the related goodwill came from the company’s $14-billion purchase of TV Guide in mid-2000, Gemstar said.
Boylan will remain as a consultant after his resignation, which is effective April 1, Gemstar said. Boylan said in a statement that he wanted to spend more time with his family.
For the current quarter, the company did not provide guidance except to say it expected revenue of $200 million in its media sector, with a 10% to 15% year-over-year decline in technology and licensing revenue, and 50% year-over-year revenue growth in interactive platforms.
Chief Executive Henry Yuen said these were “low baseline expectations.”
On a conference call, the company’s newly named general counsel, Jon Orlink, also said Gemstar expects a ruling Thursday in a petition filed with the International Trade Commission against Echo- Star Communications Corp., Scientific-Atlanta Inc., Pioneer Corp. and SCI Systems Inc.
Gemstar filed the ITC complaint last year, alleging the four companies were violating Gemstar’s patents on on-screen interactive programming guides for television.
