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Macrovision Warns of Lower Earnings

12 Dec, 2001 By: Holly J. Wagner

Digital copyright protection provider Macrovision Corp.' stocks dipped Wednesday after the company warned its fourth quarter earnings would be at the low end of projections.

The company's stock slid to $32.01 in after-hours trading from its regular session closing level of $37.80, following a mid-quarter update on fourth quarter financial projections and initial guidance for 2002.

``While taking a naturally cautious view of 2002 at this point, we remain extremely optimistic about Macrovision's prospects in its existing businesses, and in potential upside from new markets such as CD-audio copy protection and digital video watermarking,'' said Bill Krepick, president and c.e.o.

Reported volumes of DVD units Macrovision has received so far this quarter reflect large volumes associated with hit title releases anticipated in trade publications, a spokesman said, adding that volume might offset the company's soft GLOBEtrotter and digital pay-per-view businesses, a company spokesperson said.

Initial guidance for the fourth quarter, provided during Macrovision's Oct. 29 third quarter earnings release call, indicated that fourth quarter revenues and pro forma earnings per share would be essentially flat with the third quarter results.

In its initial guidance for 2002, Macrovision is "cautiously" estimating revenues between $103 million and $108 million and pro forma earnings per share between $0.84 and $0.88, down from earlier estimates of $0.88 to 0.90 per share. The consensus revenue forecast for the year among seven analysts polled by Thomson Financial/First Call slipped to between $103 million and $108 million from $119.6 million.

The company will eliminate some positions and consolidate some administrative functions. The company anticipates one-time charges of approximately $2.1 million will be incurred and excluded from the fourth quarter pro forma earnings per share computation.

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