Gemstar stock jumps after earnings surprise

Shares of the TV program listing firm rise more than 11 percent after the company reports earnings and revenue that beat analysts' expectations.

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Shares of Gemstar International Group traded up more than 11 percent today, a day after the TV program listing company reported earnings and revenue that topped analysts' expectations.

Gemstar said yesterday that fourth quarter earnings were $43.2 million, or 17 cents per share, before acquisition charges, on revenue of $84 million. Today shares rose $4.75, or 11.19 percent, to close at $47.19.

Gemstar took a $15.9 million charge for the purchases of e-book makers NuvoMedia and SoftBook. Including the one-time charge, Gemstar had net income of $27.3 million, and earnings per share were 11 cents.

Gemstar chief executive Henry Yuen said the results came from strong licensing of its VCR-Plus and electronic program guide offerings to makers of consumer gear.

Robertson Stephens analyst Michael Graham said he had been expecting earnings of 13 cents a share, before charges, on $73 million in revenue. Graham said the added revenue came largely from a $22 million payment Gemstar received from Motorola's General Instrument unit to cover past licensing activity.

"As Gemstar often has had to litigate to defend its patents and receive payment for licenses, we anticipate this revenue is necessarily lumpy," Graham wrote in a research note.

Gemstar has used its wealth of patents covering programming guides and other interactive TV features to secure license deals with many of the top consumer names, including America Online, Hughes, Microsoft, Mitsubishi, Philips, Sony and Thomson.

The company is also in the process of trying to purchase TV Guide. Graham said he is more confident than ever that Gemstar will be able to close the deal, however he said it may be late June or even July.