Rovi stock plunges 35% on bleak forecast
July 18, 2012
The company estimated its second-quarter results well below what analysts were expecting and drastically cut its full-year forecast on an anticipated weakening of sales in its consumer electronics division. A weakening consumer electronics market for devices that use its technology and a slow pace of license renewals and sales were the main reasons for Rovi’s poor outlook, analysts said.
Rovi estimates second-quarter revenue to be about $158 million. Analysts on an average were expecting revenue of $182.2 million, according to Thomson Reuters.
“Revenues in the consumer electronics (CE) sales vertical are expected to be down approximately $21 million from the same period last year, primarily as a result of an anticipated decline in analog content protection (ACP) revenues,” the company said.
Rovi’s consumer electronics customers include Apple, Panasonic, Samsung and Sony. The segment generated 46 per cent of the company’s revenue last year.
Rovi expects adjusted full-year pro forma revenue to be between $650 million and $680 million, down from its previous forecast of $755 million to $785 million.