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4th-Quarter Loss Narrower for Gemstar

Expenses fall while revenue declines. The TV Guide publisher raises its '04 operating income forecast.

March 03, 2004|From Bloomberg News

Gemstar-TV Guide International Inc., the publisher of TV Guide, said Tuesday its fourth-quarter loss narrowed to $491.4 million as expenses declined though revenue fell 11% as the company sold fewer copies of the magazine.

The net loss of $1.20 a share shrank from $1.3 billion, or $3.19 a share, a year earlier, the Pasadena-based company said. The earlier loss included expenses of $1.1 billion to write down the value of assets.

Revenue in the latest quarter declined to $217.1 million from $244.7 million a year earlier.

Under Chief Executive Jeff Shell, Gemstar redesigned TV Guide last year.

Shell, 38, also is signing more agreements for Gemstar to provide technology that cable and satellite TV services use to offer on-screen program guides and has been settling patent lawsuits that his predecessor, Henry Yuen, had pursued. Yuen had claimed rights to technology behind the on-screen guides that broadcasters use to show program choices.

The latest settlement came Tuesday when No. 2 satellite TV broadcaster EchoStar Communications Corp. agreed to pay Gemstar $190 million to license Gemstar's interactive program guide technology.

Since Yuen's ouster in 2002, Gemstar has settled suits against electronics makers Pioneer Corp, Thomson and TiVo Inc.

"Gemstar's done a good job at putting out fires in 2003 by settling these lawsuits," said April Horace, an analyst with Janco Partners Inc. in Greenwood Village, Colo. Gemstar shares today rose 45 cents to $7.95 on Nasdaq. The stock has more than doubled in the last year.

The recent quarter's loss included expenses of $416.5 million to write down the value of assets, most of which were associated with the magazine, Chief Financial Officer Brian Urban said on a conference call with analysts. Gemstar also had $75 million in expenses related to shareholder lawsuits and other legal matters.

The company said last month that it settled a suit with shareholders who accused the company of overstating revenue by $223 million from 2000 through 2002 under Yuen. Gemstar has restated its financial results for that period. Stanley Arkin, a lawyer for Yuen, has said Gemstar's accounting was proper and approved by its auditors and attorneys.

Gemstar raised its forecast of operating income for 2004 to as much as $69 million. In November, Gemstar said it expected no more than $47 million in operating income this year. The profit measure excludes interest, taxes and some other items.

Gemstar said its new profit forecast included revenue from technology licensing agreements signed last quarter with companies including EchoStar, cable TV provider Comcast Corp. and electronics maker Pioneer Corp.

Gemstar's long-term debt declined 15% to $138.7 million at the end of the recent quarter from a year earlier. The company's debt is rated BB-minus by Standard & Poor's, three levels below investment grade.

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