Digital media specialist Rovi
Well there's always the guidance bugbear. For 2011, management sees adjusted earnings of $2.20 to $2.50 per share on about $800 million in sales, including contributions from soon-to-be-acquired digital video wrangler Sonic Solutions
Add up the separate analyst forecasts for Sonic and Rovi for that period, and you'd get something like $2.60 of earnings per current Rovi share on $868 million in combined sales. While some inefficiencies are always to be expected when integrating two companies, that forecast falls far short.
Management spent a lot of time in the earnings call talking about Sonic Solutions and its expected impact on Rovi's operations. Movie store portal deals with Dell
I'm a skeptic of Sonic's (or Rovi's) chances when it comes to becoming a digital video store powerhouse with its cookie-cutter service model. Between Apple's
If there's any value in the Sonic deal, it would be found in the company's consumer-friendly media management software, which is a credible competitor to offerings from Apple and others. Let's see how long it'll take for Rovi to figure it out. Maybe Mr. Market is dumping Rovi's stock today because management doesn't seem to understand what it's really buying.
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