Gemstar Posts a Loss

Gemstar-TV Guide International Inc. swung to a loss in the third quarter as it continued to lose money on its flagship, TV Guide magazine.

The company, which also licenses technology for interactive program guides to cable television and electronics companies, reported a net loss of $18.1 million, or 4 cents a share, in the quarter ended Sept. 30, compared with a profit of $3.9 million, or 1 cent, in the same period last year.

Revenue fell 12.4% to $207.6 million, compared with $236.9 million in the same quarter last year.

Analysts surveyed by Thomson First Call had expected a loss of 7 cents a share.

During the quarter, Gemstar relaunched TV Guide with a new logo, an expanded movie guide, shorter articles, more viewing recommendations and easier to read channel listing grids.

The company also signed a multiyear licensing agreement for its program guide and other technology with Time Warner Cable, a goal that had proven to be elusive with the company’s former management, which often had an antagonistic relationship with cable companies.

For the first time since the management change, the company gave financial guidance Thursday, saying it expects revenue for 2004 of $22 million to $47 million and earnings of 2 cents to 6 cents a share.

During a conference call with analysts, Gemstar Chief Executive Jeff Shell expressed cautious optimism about TV Guide magazine, which had been neglected in recent years.

Gemstar will raise the newsstand price of the magazine by 50 cents in January. Circulation rose in September compared with August, but still lagged behind last year’s sales.

“We believe we are gradually headed to a stabilization of newsstand sales,” Shell said.

The company also had increased legal costs during the quarter related to a Securities and Exchange Commission investigation, patent lawsuits and the resolution of legal issues with former CEO Henry Yuen.

For the first nine months of the year, Gemstar reported a net loss of $86 million, or 21 cents a share, compared with a loss of $5.12 billion, or $2.26, in the same period last year.

Shares of Gemstar fell 8 cents to $4.68 on the Nasdaq Stock Market.