Gemstar-TV Guide Announces Third Quarter 2003 Results; Company Provides Full-Year Guidance for 2004

Business Wire, Nov 13, 2003

Business Editors

LOS ANGELES--(BUSINESS WIRE)--Nov. 13, 2003

Gemstar-TV Guide International, Inc. (NASDAQ: GMST) ("Gemstar-TV Guide" or the "Company") announced that for the third quarter ended September 30, 2003, the Company had a net loss of $18.1 million, or $(0.04) per diluted share. This compares to net income of $3.9 million, or $0.01 per diluted share in the third quarter of 2002. Third quarter revenues decreased by $29.3 million, or 12.4% to $207.6 million, down from $236.9 million in the comparable prior year quarter.

Operating loss for the third quarter ended September 30,2003 was $24.2 million, which includes amortization and depreciation charges of $25.0 million and a $3.8 million charge related to the resolution of an outstanding legal matter. Operating loss for the third quarter ended September 30, 2002 was $32.1 million, which includes amortization and depreciation charges of $72.9 million.

"Our financial results from this quarter are in line with what we expected and reflect the challenges we continue to face as we proceed down the road towards revitalizing some of our key businesses," Gemstar-TV Guide CEO Jeff Shell said. "While we are not satisfied with our financial results for the quarter, we believe that this was an important quarter for the Company as we executed several key operational initiatives that we believe will be critical to our future growth.

"First, we redesigned and re-launched our flagship TV Guide magazine in September. The redesign of the magazine has been well received by consumers and advertisers. Second, we reached a milestone agreement with Time Warner Cable followed by an agreement with Insight Cable, each of which signals that the dramatically revised strategy we have crafted for our IPG business is beginning to bear fruit. Finally, we continued to build momentum in our CE licensing area by signing agreements with Sharp, Samsung and Matsushita and feel we are poised to capitalize on the transition to digital as well as the growing popularity of digital video recorders," continued Shell. "We believe that our Company is moving in the right direction."

Certain Key Third Quarter 2003 Developments

-- Gemstar-TV Guide signed a long-term licensing and distribution

agreement for Time Warner Cable to utilize the Company's

intellectual property and technology as well as the TV Guide

brand and content on interactive program guides ("IPGs")

throughout its digital subscriber base. The agreement offers

Time Warner Cable the flexibility to deploy Gemstar-TV Guide's

interactive program guide, its own IPGs or IPG products

supplied by its vendors.

-- The Company announced a licensing and distribution agreement

with Insight Communications to deploy TV Guide Interactive to

support Insight's interactive digital services platform,

including video-on-demand (VOD) service, high-definition (HD)

programming and digital video recorder (DVR) functionality.

Insight plans to begin deploying the most advanced version of

TV Guide Interactive to its DVR-enabled customers in time for

the 2003 holiday season.

-- In September, the Company unveiled its redesign of TV Guide

magazine, featuring an updated, easier-to-use format to help

readers navigate the countless programming choices available

today. The new TV Guide also debuted 10 new pages of editorial

content, with more recommendations and reviews, as well as

behind-the-scenes reports. Finally, the magazine sports a new,

bolder design and a contemporized TV Guide logo.

-- The Company signed multi-year licensing agreements with Sharp,

Samsung Electronics and Matsushita Electric to incorporate

Guide Plus products into digital television sets and

recording devices, reaffirming its position as the global

leader in IPG technology.

2004 Outlook

For the first time since its corporate management restructuring, Gemstar-TV Guide International is offering full-year financial guidance. In 2004, we expect revenues from our TV Guide magazine, Superstar/Netlink Group C-band satellite, and our VCR Plus businesses to continue to decline, albeit at lower than historical rates. We expect these declines to be largely offset by growth in our TV Guide Channel, TV Guide Interactive, TV Games and Guide Plus businesses. We also anticipate lower expenses for TV Guide magazine marketing and promotion, as well as for corporate and intellectual property related legal matters. For the year ending December 31, 2004, the Company expects to achieve operating income of $22.0 million to $47.0 million which includes depreciation, amortization and stock compensation of approximately $78.0 million. Earnings per diluted share is expected to be between $0.02 and $0.06. It is important to note that these expectations do not include any financial impact arising from the resolution of any of the Company's pending legal proceedings.

3Q03 Segment Performance

The schedule below reflects Gemstar-TV Guide's performance for the quarters ended September 30, 2003 and 2002 by segment (please also see the Company's Form 10-Q filed today which contains more detailed information, such as revenue by business unit, on each segment):