Rovi: DivX sale on target for Q2

Rovi Corp’s CEO Thomas Carson confirmed during the company’s analysts call that its plan to sell its DivX and MainConcept divisions are on track, and that the disposal will wrap by the end of Q2.

Stripping those two division’s revenues and so forth out from the numbers, Carson said its full year revenues were up $12 million to $538.1 million in the year to Dec 31st. He explained that a long-term agreement with Samsung had been extended to cover second screens. Operating margins improved from 38 per cent to 41 per cent and hinted that the 46 per cent achieved during Q4 would settle down to nearer 40 per cent-42 per cent as the year progressed.

During the year, Rovi bought back for cancellation a total of 9.1 million shares, of which 4.1 million were bought back in Q4. Rovi also repaid $200 million of debt during the final 3 months of last year.

Guidance for this trading year is for revenues of $500 million – $550 million, with some 90 per cent of those targets being “visible” for the year ahead. Renewal contracts were signed with Sony and Cox. “Cox is notable, not only because they are a large cable company and they renewed early, but because of the licence terms,” he added. “This [Cox] agreement covers both the TV and TV Everywhere use-cases and extent out into the next decade. We believe that Cox renewable is well for negotiations with other large providers, whose contracts come due in late 2015 and early 2016. We believe this agreement is reflective of the number of appropriate patents we offer and their relevance to where the industry is evolving.

Carson said that Rovi had also secured agreements with 26 agreements in North and South America, and “all with increased rate”. One of these deal is a “comprehensive agreement” with América Móvil.

Posted by on Feb 14 2014. Filed under Articles, Business, M&A, Results.

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