Macrovision slumps on warning
By Rex Crum, CBS.MarketWatch.com
Last Update: 8:00 AM ET Nov. 2, 2004
SAN FRANCISCO (CBS.MW) -- Shares of Macrovision crumbled 13 percent in pre-open trading Tuesday after the electronic licensing and copy-protection technology company said its fourth-quarter results would likely be lower than analysts' estimates.
Macrovision (MVSN: news, chart, profile) fell $3.14 to $24.44 in Instinet, after it said late Monday that it expects to post earnings, excluding charges, of between 25 cents and 27 cents per share, on revenue of $50 million to $53 million. Analysts had forecasted Macrovision to earn 28 cents a share on $54 million in revenue.
Ian Halifax, Macrovision's chief financial officer, said in a conference call that the company's results for the fourth quarter would be affected by trends in DVD copy protection and pricing, "as well as our belief that we closed some deals in Q3 that had been anticipated for Q4."
Chief Executive Bill Krepick added that the company has lost some market presence because some movie studios are moving toward using the company's cop protection technology on a title-by-title basis.
The Santa Clara, Calif.-based company is focusing on combining its antipiracy technologies into a package that includes DVD copy protection, file-sharing content management services and other technologies, he said.
Macrovision doesn't expect to see the results of selling its solutions as a product package until early in 2005, according to Krepick.
Piper Jaffray analyst Gene Munster trimmed his fourth-quarter earnings and revenue forecasts to reflect the company's lowered outlook, but reiterated his "outperform" rating on the stock.
"While the Street will be disappointed in guidance, we maintain out belief that Macrovision is best positioned to capitalize on the growth in copy protection for software and video," Munster said in a note to clients.
J.P. Morgan's Sterling Auty kept the rating at "underweight" due to concerns over pricing and usage in its DVD copy protection business.
The company's executives offered their fourth-quarter outlook while delivering the third quarter's results.
The company reported a third-quarter profit of $1.3 million, or 3 cents per share, on $48.9 million in revenue. Excluding charges, Macrovision earned $11.2 million, or 22 cents a share. Analysts surveyed by Thomson First Call estimated it would earn 19 cents a share on $46 million in revenue.
During the same period a year ago, Macrovision earned 19 cents a share on $31 million in revenue. The company said its results showed some impact of its purchase of InstallShield Software, which closed during the quarter.
