Gemstar Swings to a Loss

Gemstar-TV Guide International Inc. on Thursday posted a second-quarter loss as advertising revenue and circulation declined at TV Guide magazine, and forecast further losses related to the redesign of the weekly television publication.

The company, which also sells an interactive program guide to cable and satellite television services, reported a net loss of $5.1 million, or 1 cent a share, compared with a year-earlier profit of $42 million, or 10 cents a share.

Analysts on average were expecting a loss of 5 cents a share, according to Reuters Estimates.

The year-earlier results included a gain from the settlement of a lease obligation and a tax benefit.

Revenue fell nearly 1% to $177 million. Wall Street was expecting $171.6 million.

Publishing revenue fell 11%; cable and satellite revenue rose 10%.

Last month, the company said that in an attempt to win over readers and advertisers, it would shift TV Guide from its familiar digest size to a full-sized magazine with more celebrity features and fewer program listings.

Gemstar said it expected that because of those actions, TV Guide magazine, excluding Inside TV, would incur operating losses of $90 million to $110 million in 2005 and 2006; about $55 million to $65 million of those losses will come in 2005.

The new version of TV Guide magazine will begin to contribute positively to the company’s publishing segment’s adjusted earnings before interest, taxes, depreciation and amortization in about three years.