OK GMST what do we think of it??? I tempted to buy
some down here at 40
..... good doctor can you prescribe a tonic or something
to relieve me of my madness -vbg-
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Tuesday November 14, 2:02 pm Eastern Time
Forbes.com
Gemstar-TV Guide Stock Plunges
By Mark Lewis
Gemstar-TV Guide today plunged almost 24% after the company released its first financial results since the merger of Gemstar International and TV Guide. All the quarterly numbers are not in yet, but investors, unlike voters, were not waiting for a recount--they bailed out en masse.
Gemstar (Nasdaq: GMST - news) was off $12.88 to $41.81 in afternoon trading, even as the Dow Jones Industrial Average and the Nasdaq Composite soared. Analysts who follow the company are waiting for the more detailed financial statement Gemstar is to file with the Securities and Exchange Commission (SEC) within the next few days. Meanwhile, nervous investors who were not sure how to interpret the numbers solved the problem by dumping the stock.
``It's difficult to perfect estimates under those circumstances,'' says Joseph Arsenio, an analyst for Chase H&Q. ``It's the first time out of the box since the merger,'' Arsenio notes, and the partial release of numbers ``was sort of an awkward introduction.''
The numbers released late yesterday showed a mixed picture: Earnings before interest, taxes, depreciation and amortization (EBITDA) was up 30% for the quarter ending Sept. 30, but pro-forma revenue came in at $337.7 million, off slightly from the year-ago quarter. That was enough to scare investors. Gemstar, which completed its merger with TV Guide in July, is another of those new-economy concepts yoked to an old-economy cash cow. This quarter, the cow did not provide as much milk as expected.
``The downturn in revenue was a result of a slowing in the subscriber base of TV Guide Magazine,'' Robertson Stephens analyst Lowell Singer says in a research note. ``We anticipate that this slowdown will continue and that total revenue from Gemstar will likely be flat to slightly up in future quarters.''
Analysts still like Gemstar for the long-term potential of its interactive program guides and its e-book business. ``The market's probably overreacting here,'' Arsenio says. ``In the long run, this is an excellent company.''
But investors hate uncertainty. So at least until that quarterly SEC report is filed, Gemstar's prospects appear clouded. ``Unfortunately, there's some confusion now,'' Arsenio says. ``We're going to be waiting for those numbers.'' |
