Rovi Corp. Reports Q3 Loss, May Sell DivX30 Oct, 2013 By: Chris Tribbey
Technology company Rovi Corp. Oct. 30 reported a third-quarter loss of $11.5 million, on revenue of $143 million. That’s compared with a third-quarter 2012 loss of $13.3 million on revenue of $163.7 million.
Operating income from continuing operations was $12.2 million for the quarter, down from $31.1 million the previous year.
Rovi attributed the drop in revenue to a lack of new licensing agreements during the three months ended Sept. 30, as well as continued revenue declines within the company’s consumer electronics video delivery services.
“While we made significant progress toward closing some major deals this past quarter, the reality is that it is taking longer than anticipated to close these transactions and, as such, we did not close any of these expected deals,” said Rovi president and CEO Tom Carson. “While we are disappointed in the impact this has on our short-term results, we remain sharply focused on the long-term interest of our stockholders, maximizing the long-term value of our IP portfolio and confident in the value of our assets.
“Looking ahead, we continue to believe that we will come to agreeable terms with these parties, but feel it is prudent given the continued delay to reduce our expectations for fiscal 2013,” he added.
Rovi also announced that it authorized its board of directors to review strategic alternatives for its DivX business, which could mean a sale of the widely used video software platform. The company has retained Wells Fargo Securities as a financial adviser.
“It is critical we maximize the value of our assets for our stockholders. We believe a strategic review for DivX is an important step for Rovi as we focus on growth opportunities, cost structure and the overall strategic fit of DivX within our core business,” Carson said.
Rovi bought Sonic Solutions and its DivX business in late 2012. Sonic Solutions had acquired DivX earlier in that year.