Shares of digital technology company Rovi Corp. (ROVI: Quote) lost the most in a year after it cut its full year 2012 outlook on Tuesday, citing lower second-quarter analog content protection revenue, delays in adding new patent licensees, and failure to launch new products in time.
Rovi also provided a weak outlook for the second quarter, expecting to report a loss from continuing operations, as well as a year-over-year decline in sales.
Santa Clara, California-based Rovi provides digital entertainment technology solutions. In the second quarter, Rovi said revenue in in the consumer electronics (CE) vertical are expected to be down about $21 million from last year, owing to an expected drop in analog content protection (ACP) sales.
Other reasons Rovi cited in its pruned full year outlook include delays in adding new patent licensees in key growth areas including CE manufacturers.
Rovi noted that while it still expects to enter into its patent licenses without litigation, the company has in some cases been unable to negotiate terms with prospective licensees.
"We don't anticipate ultimately losing revenues as a result of these delays, and we continue to anticipate significant growth in our licensing business from 2011 to 2013," said Rovi CEO Tom Carson.
Rovi also attributed its sliced outlook to delays in launch of certain products and services such as the Rovi Entertainment Store and new DivX content creation software, as well as weak results for its online properties.
Rovi now expects full year 2012 adjusted pro forma earnings of $1.60 to $1.90 per share on revenues of $650 million to $680 million. Earlier it estimated adjusted pro forma earnings of
$2.35 to $2.65 per share on revenue of $755 million to $785 million.
Analysts, based on consensus, currently expect Rovi to report earnings of $2.51 per share on revenue of $765.18 million for the full year. Analysts' estimates typically exclude special items.
The company also provided preliminary guidance for the second quarter, expecting to report a loss from continuing operations of $0.18 to $0.15 per share. It expects adjusted pro forma earnings of $0.35 to $0.38 per share. Revenue is expected to be about $158 million.
Analysts currently expects earnings of $0.57 per share on revenue of $182.64 million.
Rovi is set to announce its second quarter financial results on August 2.
Additionally, Rovi said it repurchased about 2.1 million shares of its common stock during the second quarter for nearly $50 million.
Rovi closed Tuesday's trade at $17.65, up 0.57%, on a volume of 1.6 million shares on the Nasdaq. In after hours, the stock slid 24.02% to $13.41. In the past year, the stock has traded in a range of $17.20 - $58.76.
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by RTT Staff Writer
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