Gemstar Reports $134.8-Million Loss on Acquisition Costs

Gemstar-TV Guide International Inc., the largest maker of software for on-screen television program guides, posted a second-quarter loss Monday on costs related to its $14.9-billion purchase of TV Guide Inc.

The loss was $134.8 million, or 33 cents a share. A year earlier, net income was $28.9 million, or 12 cents, the company said. Sales surged more than fivefold to $334.2 million from $63.2 million.

Gemstar’s loss stems from the cost to amortize goodwill, or the difference between the purchase price of TV Guide and its book value.

Gemstar bought TV Guide in July 2000 for its database of TV program listings and to add a new source of stable revenue and cash flow. Most magazine publishers have struggled with slumping advertising sales over the last year.

Revenue, adjusted as if the TV Guide purchase had been completed by the start of last year, fell 2.5% from $342.5 million. That reflects a 16% decline in sales at the media and services division, which includes TV Guide magazine.

Cash flow--or earnings before interest, taxes, depreciation, amortization and stock-compensation costs--at the division fell 2.8% to $62.6 million.

Revenue at the technology and licensing sector, which includes license fees from VCR Plus software for videocassette recorders, rose 36% to $80.2 million, while cash flow rose 43% to $53.2 million.

Revenue at the interactive program-guide division rose sixfold to $20.5 million, while the division’s cash flow loss narrowed to $8 million from $12.8 million.

The company was expected to generate $327.6 million in sales, the average estimate of six analysts surveyed by Thomson Financial/First Call, which said they didn’t provide per-share estimates of the quarterly loss.

The Pasadena-based company was 39%-owned by Rupert Murdoch’s News Corp. as of May.

Shares of Gemstar, which posted results after the close of regular U.S. markets, rose $1.14 to $37.09 on Nasdaq.