Rovi Corp. Earnings: Swung to a Loss but Beat Estimates

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Rovi Corporation (NASDAQ:ROVI) dropped to a third quarter loss, but results topped expectations. Rovi focuses on powering the discovery and enjoyment of digital entertainment by providing companies a broad set of integrated solutions.

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Rovi Corporation Earnings Cheat Sheet

Results: Reported a loss of $13.3 million (13 cents per diluted share) in the quarter. Rovi Corporation had a net income of $1.8 million or 2 cents per share in the year-earlier quarter.

Revenue: Fell 6.8% to $169.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Rovi Corporation reported adjusted net income of 50 cents per share. By that measure, the company beat the mean estimate of 24 cents per share. It fell short of the average revenue estimate of $177.4 million.

Quoting Management: “Last quarter I spoke about the need to improve execution and operational efficiency, and I am very pleased with the substantial progress we have made along these lines during the past three months,” said Tom Carson, President and CEO of Rovi. “After undertaking comprehensive, product-by-product operational reviews across the business, we focused on product rationalization and cost reductions this quarter and eliminated almost $31 million in annualized costs. Additionally, we eliminated plans to add an additional $5 million dollars in annual spending. This frees up funds to invest in new value-creating strategic initiatives and puts us on the path to achieving an operating margin more appropriate for our business. These actions also drove a sequential increase in our quarterly Adjusted Pro Forma Income Per Common Share and allowed us to raise the midpoint of our Adjusted Pro Forma Income Per Common Share estimates for the year.”

Key Stats:

The company trumped estimates last quarter after falling shy in the two quarters prior. In the second quarter, it missed the mark by one cent, and in the first quarter, it came in under estimates by 4 cents.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the fourth quarter has risen to 30 cents per share from 29 cents. For the fiscal year, the average estimate has moved down from $1.18 a share to $1.16 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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