Rovi selling DivX unit, provides 2014 guidance; shares -3.3% AH

After deciding to sell its Entertainment Store and consumer website businesses last July, ROVI has now decided to unload its DivX video codec licensing business. The company suggests the business, which has been pressured by the growing popularity of various alternative codecs, was good for 2013 revenue of $70M-$75M, and EPS of $0.25-$0.30. (8-K)

Rovi now expects 2013 revenue and EPS to be at the high end of the guidance ranges it claims would have been provided in October, had the DivX unit then been treated as a discontinued operation.

Not counting DivX, Rovi expects 2014 revenue of $510M-$550M and EPS of $1.55-$1.85; the consensus (includes DivX) is at $619M and $1.98. Rovi's IP licensing business is expected to see revenue of $283M, down from 2013's $293M. Cost of goods sold is expected to fall to $78M from $82.5M, and opex is expected to rise to $220.2M from $218.5M.

Rovi also discloses it bought back 4.2M shares in Q4, and paid down $200M in debt.

Shares are down AH after rising 2.9% in regular trading, gradually paring the early gains they saw in response to news of several licensing deals.

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