Friday, July 30, 2010

Rovi (ROVI) With a Quite Large Beat on EPS

Rovi (ROVI) actually rallied in after hours after a quite large beat on EPS yesterday evening, but that does not make it correct to have held such a position size going into earnings.  If I had reviewed the earnings reports list yesterday, this one would have been cut back just as any other stock and then we could get back in at much lower risk, after the fact.  Every so often you are going to have a stock run away from you by going this route, but at least you don't get Vistaprinted.

With that said, I will say I am happy I did not get hit with 2 bullets today but just one ... I can tell this stock is completely off the radar of the momo crowd because no one (AP, Reuters) wrote a story about it, and a whopping 2 people had a comment on Yahoo message boards post earnings.   I am good with that. 

Technically, after what seemed to be a new breakout Monday (not so much), the stock has been reversing the past 3 days working off an overbought condition and settling right at its 20 day on the close Thursday.  Conditions remain favorable as long as the stock holds its multi month breakout over $40.  Which is also where the 50 day moving average has risen to in the past few days.  As always the stock will be dominated by the overall market, so if the S&P 500 starts falling apart, the chances of Rovi standing up are slim... and vice versa.

Analysts were in for $129.5M revenue and $0.46 EPS for the quarter.  

This company puts out one of the shortest earnings report in terms of prose that I have seen.

Via ROVI's earnings release:
  • Rovi Corporation (Nasdaq:ROVI - News) announced today that it had second quarter 2010 revenues of $134.8 million, compared to $119.5 million for the second quarter of 2009. (+12.8% year over year)
  • Adjusted Pro Forma Income Per Common Share for the second quarter of 2010 was $0.55, compared to $0.38 for the second quarter of 2009. 
  • "We completed another excellent quarter, growing revenue by 13% in Q2 2010, when compared to Q2 2009, and growing our profit by even more during the same period," said Fred Amoroso, President and CEO of Rovi. "In addition, we achieved a number of important business objectives, including winning additional business for TotalGuide, expanding our licensing program, growing advertising revenues, and continuing to retire debt."

  • "Given the strength of our performance in the first half of 2010, we are raising our estimates for annual Adjusted Pro Forma Income Per Common Share to a range of $1.90 to $2.10," added James Budge, Chief Financial Officer of Rovi.
[Jul 15, 2010: Bookkeeping - Beginning Rovi]

Long Rovi in fund; no personal position

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