Gemstar Stock Plunges

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Shares in Gemstar-TV Guide International Inc. dropped 37 percent Tuesday after the company revealed some accounting practices that Wall
Street analysts thought were questionable in its annual report.

Gemstar recognized $107.6 million in revenue from Scientific-Atlanta Inc.
even though it hasn't received any payments from the set-top vendor during the past year.

Gemstar officials defended the accounting line, noting that they expect patent-infringement suits Gemstar is waging against S-A to eventually lead
to Gemstar collecting that money.

Gemstar also recognized $20.8 million in interactive-program-guide ad revenue that
was noncash in nature, which concerned analysts, as well.

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