Gemstar: $6 Billion Loss on Writedowns
Monday March 31, 5:39 pm ET
LOS ANGELES (Reuters) - Gemstar-TV Guide International Inc., which provides TV program guides, on Monday reported a loss of more than $6 billion for 2002 on write-downs for goodwill.
The company also, for the third time this year, said it would restate past results as part of an ongoing review of its accounting practices.
The cumulative effect of those three restatements was to reduce revenue by $255.8 million and earnings before interest, taxes, depreciation and amortization by $248.2 million in 2000, 2001 and the first three quarters of 2002.
Gemstar reported a net loss of $6.23 billion, or $15.17 per share, for fiscal 2002, compared with a year-earlier loss of $750.7 million, or $1.83 per share. Revenue was $1 billion versus $1.16 billion in the prior year.
The Pasadena, California-based company is under formal investigation by the U.S. Securities and Exchange Commission (News - Websites) over its accounting practices.
Gemstar shares closed down 1.1 percent, or 41 cent, to $3.67 on Nasdaq before the news. The shares are up nearly 13 percent after falling 88 percent in 2002.
Gemstar's problems started last March, when the company's president, Peter Boylan, resigned and it said it would have to take a write-down of up to $5 billion to amortize goodwill related to the $14 billion purchase in July 2000 of TV Guide.
The company, whose largest shareholder is media conglomerate News Corp. Ltd., later revealed it had booked millions in revenue it had not received and would not receive unless it won a favorable ruling in a court case.
The company in June lost a key patent dispute, which set off a series of legal setbacks in other complaints across the country. Gemstar in August announced a restructuring that led to the October resignation of founder and Chief Executive Henry Yuen and Chief Financial Officer Elsie Leung.
The California Public Employees' Retirement System, better known as Calpers, the nation's No. 1 pension fund, last week characterized Gemstar's management as among the six most ineffective in the country.
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Gemstar Releases Restated Results for Past 3 Years
Monday March 31, 6:25 pm ET
PASADENA, Calif. -- Gemstar-TV Guide International Inc. released its restated results for parts of the past three years, reducing revenue by $255.9 million, or 8.5% of initially reported figures.
Gemstar said late Monday it has reduced initially reported revenue for the year ended March 31, 2000, by $42.7 million to $186.5 million and the nine months ended Dec. 31, 2000, by $24.7 million to $669.9 million.
The company revised its 2001 revenue downward by $129.7 million to $1.16 billion and lowered earlier-reported revenue for the first three quarters of 2002 by $58.8 million to $756.7 million.
As for earnings before interest, taxes, depreciation and amortization, or Ebitda, they were cut by a combined 27%, or $248.2 million.
Ebitda for the year ended March 31, 2000, was revised lower by $44.6 million to $75.9 million, and Ebitda for the rest of 2000 was reduced by $28.9 million to $176.8 million. Ebitda for 2001 was cut by $110.4 million to a restated $ 267.6 million, while the figure for the first nine months of 2002 was lowered by $64.3 million to $153.4 million.
Revised net-loss figures weren't provided.
Meanwhile, Gemstar reported its revenue in the fourth quarter of 2002 slumped 18% to $244.7 million from $298.8 million.
The company had a loss before interest, taxes, depreciation and amortization of $33.6 million, versus year-earlier Ebitda of $78.7 million. The fourth quarter's results included a number of "non-recurring" items, including a $25.9 million charge associated the firm's management and corporate-governance restructuring in November.
Gemstar didn't offer a net-loss figure for the fourth quarter.
For all of 2002, Gemstar had a net loss of $6.4 billion, or $15.64 a share, compared with a year-earlier net loss of $750.7 million, or $1.82 a share. Revenue fell 14% to $1 billion from $1.16 billion. Ebitda tumbled 55% to $119.7 million from $267.6 million on the revenue drop and "non-recurring" costs.
At 4 p.m. EST on the Nasdaq Stock Market (News - Websites), shares of Gemstar were down four cents at $3.67. In after-hours activity, the stock fell to $3.30, according to Island ECN (News - Websites).
In November, Henry Yuen and Elsie Leung formally resigned as chief executive and chief financial officer, respectively, of the patent-technology company and owner of TV Guide magazine.
The duo agreed to give up their executive roles under pressure from News Corp. (NWS), which owns about 43% of the stock and had become increasingly unhappy with the pair's management of Gemstar. They came under fire after a series of accounting irregularities surfaced.
-Kevin Kingsbury; Dow Jones Newswires; 609-520-4367 |
