TV Guide on a slide
Gemstar combo sees mag side struggle
Gemstar-TV Guide saw its magazine business continue to suffer in the second quarter while its interactive program guide division gained subscribers and helped keep the company's performance roughly equal with last year.
Earnings come as News Corp.-controlled Gemstar has finally moved past its long-running accounting troubles related to its previous exec team headed by former CEO Henry Yuen. Company settled an investigation by the SEC in June by paying a $10 million fine.
Second quarter revenue declined 1% from a year ago to $179.1 million. Net income was up significantly at $42 million, compared with a $22.5 million loss a year ago, but the shift was due primarily to one-time events.
Guide glide
Company's TV Guide business is continuing its slow decline. Revenue was down 11.2% to $95.1 million, due primarily to lower circulation. Adjusted earnings before income tax and other costs were $1.2 million, excluding a lease settlement, compared with $7.5 million last year.
Despite a $20 million redesign last year and a more recent set of editorial changes, the magazine is still struggling to stem readership losses. It's also hunting for a new editorial topper since editor-in-chief Michael Lafavore unexpectedly resigned in May.
Cable, satellite success
Company's cable and satellite division, which licenses its interactive program guide and handles its TV Guide Channel and TVG Network horse race betting station, saw a 48% increase in revenue. Subscriber, licensing and ad revenue were up for all three properties.
The consumer electronics licensing segment generated revenue of $21 million in the second quarter.
Operating income guidance for the year stayed consistent, with the minimum bumped up due to the $10 million lease settlement. It's now expecting between $30 million and $50 million. Last quarter, Gemstar shares fell 22% after it lowered 2004 guidance and they haven't yet recovered.
Stock was down 3% at $4.30 Thursday before earnings were announced.
