November 9, 2011 / 12:06 PM / 7 years ago

UPDATE 3-Wi-Lan slashes outlook on weak dish TV sales

(Adds analyst comments, details)

* Q3 EPS $0.06 vs loss/shr $0.06 year ago

* Cut 2011 rev vie to $105-$110 mln from $110-$115 mln

* Cut 2011 adj EPS view to $70-$75 mln from $75-$80 mln

By Aftab Ahmed

Nov 9 (Reuters) - Canadian patent licensing firm Wi-Lan Inc cut its full-year outlook as sales to its major dish television customers have slowed, sending it shares down as much as 10 percent.

The company, which posted in-line third-quarter profit, has for long depended on its dish TV customers who use its V-Chip technology to filter out inappropriate programs.

V-Chip technology was legislated by former U.S. President Bill Clinton in 1996 and has been available in the U.S. and Canada since 1999. Tri-Vision, which was acquired by Wi-Lan in 2007, partnered with the developer for commercial production.

About 50-55 percent of its revenue comes from this segment, according to analysts.

“As you are going towards internet-based TVs, dish TV purchases are going to slowdown. It is not going to be a matter of one or two quarters,” Fraser Mackenzie analyst Dev Bhangui said.

The company lowered its 2011 revenue outlook to $105-$110 million from $110-$115 million earlier.

Wi-Lan, which recently bowed out of the race to buy rival Mosaid after U.S. private equity firm Sterling Partners topped its offer, now expects 2011 adjusted profit of $70-$75 million, compared with its previous forecast of $75-$80 million.

As a result of the Mosaid bid and related financing, Wi-Lan said it will take a charge of $14 million that will be spread through the first quarter of 2012.

The company said it was actively working on a number of potential licensing transactions that could close before the end of this year.

Adjusted earnings was 18 cents per share, which was as expected by the analysts, according to Thomson Reuters I/B/E/S.

Revenue more than doubled to $27.8 million.

Litigation costs fell to $1.2 million from $6.7 million.

Wi-Lan shares, which have gained more than 15 percent of their value this year, were trading down 7 percent at C$6.86 on Wednesday on the Toronto Stock Exchange. They had touched a low of C$6.67 earlier in the session. (Reporting by Aftab Ahmed in Bangalore; Editing by Don Sebastian, Supriya Kurane)

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