Wednesday, DivX, Inc. (DIVX), a digital media company, said it reached a mutually agreeable settlement with Yahoo! Inc. (YHOO) pertaining to litigation surrounding their two-year Toolbar License and Distribution Agreement of September 2007. DivX also lifted its earnings outlook for the third quarter of fiscal 2009.
DivX noted that the litigation settlement would increase its operating income in the third quarter of 2009 by about $0.29 per share or about $0.17 per share, net of related taxes. As a result, DivX upwardly revised its GAAP earnings estimate for the third quarter of fiscal 2009 in the range of $0.10 to $0.12 per share. Previously, the company expected GAAP loss in the range of $0.08 to $0.06 for the third quarter.
DivX, however, retained its non-GAAP estimates in the range of a loss of $0.02 per share to break even per share for the third quarter. Revenues are estimated to be in the range of $15.0 million to $16.0 million.
On average, nine analysts polled by Thomson Reuters expects the company to report break even per share on revenues of $15.83 million for the third quarter. Analysts' estimates typically exclude special items.
DIVX closed Wednesday's regular trading at $5.43, up 0.27 or 5.23%, on a volume of 0.741 million shares on the Nasdaq. YHOO closed at $14.79, up 0.04 or 0.27%, on a volume of 15.41 million shares on the Nasdaq.
For comments and feedback: editorial@rttnews.com