Cash flow nearly doubled at TV Guide Inc. in the second
quarter, but net income plummeted 45 percent, primarily due to extraordinary gains in the
year ago period. Despite that earnings shortfall, TV Guide was in line with analysts'
estimates for the quarter.
TV Guide reported cash flow, or earnings before interest,
taxes, depreciation and amortization, of $66.6 million in the period ended June 30 --
nearly twice last year's total of $34.2 million. The company had earnings of $9.8
million during the period, or 6 cents per share, on revenue of $313 million, matching
analysts' consensus estimates.
For the six-month period, cash flow was up by 80 percent to
$113.6 million. Net income for the first half was down 60 percent to $22.6 million, or 17
cents per share on revenue of $514.8 million.
TV Guide said the decline in net income was due primarily
to a one-time gain in the first quarter of 1998 from the addition of the Turner Vision
(not related to Turner Broadcasting System) C-ban satellite business to the
Superstar/Netlink Group LLC joint venture, and the dilutive impact of additional shares of
common stock the company issued in March to complete its acquisition of TV Guide magazine.
Excluding the one-time gain, TV Guide's net income
would have increased 9 percent to $22.3 million, or 15 cents per share, in the first half.
Most analysts expected the decline in net income, but were
confident the company would be able to right itself in the coming months. TV Guide was
"Our stable of core businesses continues with solid
financial performance and we are well positioned to capture a variety of exciting business
opportunities that are both content and technology driven," chairman and CEO Joe
Kiener said in a prepared statement.
The company has high hopes for its interactive
horse-race-wagering channel -- TV Games Network -- which launched in July.
"With the accelerating deployment of digital set-top
boxes by major cable operators, we continue to gain significant new distribution for our
TV Guide Interactive product," president and chief operating officer Peter Boylan
said in a press release. "We are also on track to deploy a software download later
this fall that will add interactive advertising into the TV Guide Interactive portal in
all of our over two million homes."