Gemstar Restates $27M in Revenue1/26/2003 7:00 PM Eastern
After a review of its accounting practices, Gemstar-TV Guide International Inc. is once again taking an eraser to its past financial statements.
Gemstar, which said in November that it would restate two years worth of earnings, announced another restatement last week, eliminating $19 million in previously reported licensing revenue and $8.2 million in TV Guide Interactive guide ad revenue.
A lion's share of the canceled licensing revenues came from $18.1 million from an agreement with AOL Time Warner Inc.
The Pasadena, Calif.-based provider of interactive programming guide software and home-entertainment systems also will reclassify $26.8 million in licensing revenue as either a reduction of operating expense or as other income.
Another $47 million in reported revenue will instead be recognized over the remaining terms of the company's licensing agreement.
The last two changes stem from a settlement agreement with "a certain set-top manufacturer," according to a company statement. In October 2000, Gemstar and Motorola Inc. settled litigation that Motorola inherited when it bought General Instrument Corp.
The changes affect statements for the fiscal quarters that ended March 31, 2000, Dec. 31, 2000, and Dec. 31, 2001, and the fiscal quarters ended March 31, 2002, June 30, 2002, and Sept. 30, 2002.
The restatements will not affect the company's cash position for any of those fiscal periods, the company said.
Back in November, Gemstar announced it had hired a new independent accounting firm, Ernst & Young, to oversee its financial statements and review other financial documents. There could be additional restatements as that process continues, which "may be material," according to a company statement.