Tag - Dvd

Digital media company DivX, Inc. (Nasdaq: DIVX) reported fourth-quarter earnings a penny above the consensus on Wall Street, but issued disappointing guidance for 2008 that sent shares crumbling to a 52-week low.

Shares of DivX plummeted 29.54%, or $3.01, to a 52-week low of $7.18. Shares have been trading in the range of $8.78 to $23.76 for the past 52 weeks.

The San Diego, Calif.-based company said it expects earnings to range from $0.44 to $0.52 per share on revenues of $95 million to $100 million due to higher product development costs.

Seven analysts polled by Thomson Financial are on average forecasting revenue of $104.24 million for 2008, while five analysts polled by Thomson Financial are on average projecting earnings of $0.67 per share.

“Guidance for 2008 was substantially below consensus,” wrote Avondale Partners analyst John Bright. “We continue to believe that DIVX has an attractive licensing business model with the potential to tap into online video distribution. However, DIVX also has a transition period ahead of it.”

Bright said he sees 2008 as a transition year in which DivX will invest in new initiatives, including forming agreements to become involved in online video distribution whether with "retailers" such as Netflix, Inc. (Nasdaq: NFLX), Blockbuster Inc. (NYSE: BBI) and CinemaNow. The analyst also noted the company will expand into new product categories beyond DVD players such as Blu-Ray players, and new certifications such as DivX HD and a new H.264 certification.

Rimage Corp. (Nasdaq: RIMG) CEO Bernie Aldrich said the provider of CD and DVD publishing systems sees significant untapped opportunities in a number of large business service markets. The chief executive said some of these untapped markets include media and broadcasting, law enforcement, education, government, software and professional services. Aldrich made the comments during a morning conference call.

“We believe business service applications will drive a significant portion of our growth over the next few years,” Aldrich said. “We intend to devote considerable resources building positions in these areas similar to what we have achieved in the retail and medical markets.”

Aldrich said the Edina, Minn.-based firm’s profitable growth over the last two years has been driven by its ability to penetrate the retail and medical imaging markets. Rimage’s equipment has become the retail industry standard for on-demand publishing systems for CDs, DVDs and Blu-Ray discs, he said.

“We continue to see good opportunities in these markets both here and overseas that we will pursue aggressively in the years ahead,” Aldrich said.

He said Rimage is also moving into mammography imaging in the medical market.

Before the opening, Rimage posted fourth-quarter earnings of $4.5 million, or $0.45 per share, up 25% from $3.6 million, or $0.34 per share, a year earlier. Wall Street analysts expected earnings of $0.32 per share.

DivX, Inc. (Nasdaq: DIVX) reported third-quarter earnings that surprised the Street by 41% after Monday’s close and raised full year fiscal earnings guidance.

Shares of DivX jumped 28.98%, or $3.47, to $15.45 at 11:59 a.m. ET, on the fundamental news. Shares of DivX have been trading in the range of $11.35 to $31.89 for the past 52 weeks.

For the three months ended Sept. 30, the creator of products and services designed for media applications, reported net income of $5.9 million, or $0.17 per diluted share, above the Thomson Financial mean estimate of $0.12 per share.

DivX booked record revenue for the third quarter of $21.9 million, representing an increase of 42% over revenue of $15.4 million earned in the third quarter last year.

“DivX is fundamentally performing well and the outlook for the company is financially positive,” said Avondale Partners analyst John Bright. “Increased adoption of the DivX certification software and DivX Connected product will drive growth into 2008.”

During the quarter DivX said it launched DivX Connected and will rollout the first DivX Connected devices in Europe in the fourth quarter.

The San Diego, Calif.-based firm also said it strengthened relationships with major OEM partners and saw greater consumer adoption in its licensing business during the quarter. Additionally, DivX said it made a new agreement with Qualcomm, extended an existing relationship with Samsung for its new mobile initiative and signed a multi-year renewal license with LG Electronics.

The company raised its earnings guidance for the full fiscal year and issued fourth-quarter earnings guidance. For the full year ending Dec. 31, DivX said it now expects EPS to range from $0.57 to $0.59, up from its original EPS guidance range of $0.48 to $0.51.

The consensus of six analysts polled by Thomson Financial was for earnings of $0.49 per share.

For the fourth quarter, DIVX is projecting EPS in the range of $0.16 to $0.18, above the mean estimate of earnings of $0.14 per share forecasted by six analysts polled by Thomson Financial.

Bright, who currently has a rating of “market outperform” on the stock, is forecasting earnings of $0.58 per share for the full year and $0.17 per share for the fourth quarter.

Citing bad weather, stiff competition, weak movie releases and the shift in daylight savings time, CEO Joe Malugen acknowledged the feeble results but maintained he is “encouraged by developments” in the company’s video game efforts and digital offerings.

This morning before opening, the Dothan, Alabama-based company reported a net loss of $14.7 million, or $0.47 a share, for the first quarter ending April 1, compared with a profit of $40.3 million, or $1.27 a share, a year earlier. First quarter revenues were $647.7 million, down 6.7% from $694.4 million in 2006.

Analysts polled by First Call/Thomson Financial expected earnings per share of $0.53 on revenues of $660.5 million.

Shares of Movie Gallery, which holds the second-largest portion of the North American video rental market, were about 6% lower in mid-session trading, at $3.32. In the last 52 weeks, the stock’s has traded as high as $8.35 and low as $1.85.