Rovi looking to sell DivX after 3Q earns miss
Rovi Corp., a provider of TV listings and other metadata, on Wednesday posted a third-quarter profit and revenue decline greater than Wall Street forecasts as it failed to close some major deals. It slashed its outlook and announced a strategic review of its DivX video player business. Its shares fell.
The net loss in the three months through Sept. 30 shrank to $11.5 million, or 12 cents per share, from a net loss of $13.3 million, or 13 cents per share, a year ago.
Excluding the amortization of intangible assets and other items, adjusted earnings came to 41 cents per share, below the 48 cents expected by analysts polled by FactSet.
Revenue fell 13 percent to $143 million from $163.7 million. That was also worse than the $152 million analysts were looking for.
Given the continued delay in closing the major deals which it did not specify, CEO Tom Carson said it was "prudent" to reduce the company's expectations for the fiscal year.
The company said it now expects annual revenue of $585 million to $615 million, below the $600 million to $630 million it forecast in July, which itself was a downgrade from previous expectations.
It also now expects annual adjusted earnings of $1.70 to $2 per share, below the July estimate of $1.80 to $2.10 per share.
Analysts had been looking for annual earnings of $1.94 per share and revenue of $613.5 million.
Carson also said the company had retained Wells Fargo Securities as an adviser to potentially sell its DivX business, calling it "an important step for Rovi as we focus on growth opportunities, cost structure and the overall strategic fit" of the business.
Shares fell $1.62, or 8.5 percent, to $17.35 in after-hours trading after already dropping 2.4 percent in the regular session to $18.97. Shares are down from a high set in June of $26.55 but are above a 52-week low of $13.25.