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Gemstar Reports Loss; Delisting Hearing Today

September 27, 2002|From Reuters

Gemstar-TV Guide International Inc., the publisher of TV Guide magazine, Thursday posted a preliminary second-quarter loss of $953.8 million after more than $1 billion in asset write-downs as it prepares for a Nasdaq delisting hearing today.

Shares of the Pasadena company fell 11% in morning Nasdaq trading immediately after the news, but came back a little to close at $2.90, down 34 cents, or 10%.

The company is subject to delisting from Nasdaq because it missed an Aug. 14 deadline to file audited second-quarter results. The company has yet to file its final audited results with the Securities and Exchange Commission.

Gemstar delayed its results while it investigated the allocation of revenue between its interactive division and media services sector.

The probe, completed this month, led to the reclassification of $2.7 million in advertising revenue from its interactive division to its media services division.

Gemstar said that for the second quarter, it had a consolidated loss before interest, taxes, depreciation and amortization of $54.2 million, or 13 cents per share, compared with a profit on the same basis of $108 million, or 26 cents per share, a year earlier.

Including write-downs of more than $1 billion for impaired assets, it posted a net loss of $953.8 million, or $2.32 per share, compared with a loss of $134.8 million, or 33 cents per share, a year earlier.

Revenue in the second quarter was $271.7 million, down from $320.5 million a year earlier.

Gemstar said it has not yet filed its audited quarterly report because independent auditor KPMG has not signed off on the numbers.

The company said that because of its disagreement with KPMG, it is requesting guidance from the office of the SEC's chief accountant on how to proceed.

Because of adverse rulings in a number of patent cases, Gemstar said it has decided to take a reserve of $113.5 million related to revenue it was accruing from Scientific-Atlanta Inc. but had not collected.

It also said it would write down $44.4 million in capitalized litigation costs.

Gemstar said no action has been taken on a management restructuring proposal by executives and Gemstar's largest shareholder, News Corp.

At the time of that mid-August proposal, sources close to News Corp. said it included the removal of Henry Yuen as Gemstar chief executive.

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