Gemstar Posts Profit, Higher Sales

Gemstar-TV Guide International Inc., the publisher of TV Guide magazine, said Wednesday that it earned $1.64 million in the fourth quarter as it cut costs and sales rose.

Net income was break-even on a per-share basis. A year earlier, the company posted a net loss of $491.4 million, or $1.18 a share. Sales increased 5.8% to $186.6 million from $176.3 million.

Gemstar has brought in new managers, including Chief Executive Rich Battista in December, to strengthen its publishing business, whose advertising and newsstand sales have slumped. The company cut expenses in the quarter by 30% to $181.4 million, with improvement at its publishing and consumer electronics licensing unit.

The company last month hired Steve LeGrice, co-founder of In Touch Weekly, and said it would start a new weekly, Inside TV, to focus on celebrities. The company named Ian Birch as editor in chief of TV Guide in September.

Analysts expected Gemstar to break even on a per-share basis, according to Thomson First Call. Sales were expected to fall 14% to $186.5 million.

In after-hours trading Wednesday, shares of Gemstar rose 7 cents to $5.50, after the company announced its results. Earlier they fell 7 cents to $5.43 in regular Nasdaq trading.

The company’s year-earlier loss included expenses of $416.5 million to write down the value of intangible assets. Gemstar also had $75 million in costs related to shareholder lawsuits and other legal matters.

Rupert Murdoch’s News Corp. as of November owned 42% of Gemstar, which is the biggest maker of software that runs electronic TV-program guides.

Former Gemstar Chief Executive Henry Yuen last month agreed to settle a lawsuit filed by the Securities and Exchange Commission over an alleged $248-million accounting fraud.

The SEC in 2003 accused Yuen and former Gemstar Chief Financial Officer Elsie Leung of reporting false ad sales to inflate revenue.

Details of the proposed agreement weren’t disclosed.