SAN FRANCISCO - The news that Macrovision ( MVSN) and its client Motorola ( MOT) have kissed and made up could make the software developer a candidate for an earnings surprise next month.
The companies disclosed late Tuesday they had settled a suit filed by Macrovision in July to collect millions in back royalties payments. They also issued a joint statement indicating that Motorola would continue to use Macrovision software in its set-top boxes. Using an arm-twisting contract renegotiation strategy, Motorola had withheld roughly $12 million in back royalty payments on Macrovision's analog copy protection technology shipped in set-top boxes, beginning in 2006. And Motorola was continuing to stonewall Macrovision to the tune of at least $2 million a quarter, the software vendor said in July upon filing suit. The hardball strategies appear to have worked for both parties. Without disclosing terms of the settlement, Macrovision was trading up 16 cents, or 0.6%, to $25.62 Wednesday. With settlement of the case comes the expectation that Macrovision will receive payment from its customer, although probably not the full amount. Macrovision's stock fell precipitously in July when the company issued an earnings warning over its receivables from Motorola and the failure to close a multimillion dollar deal in the June quarter. That deal finally came through, but the stock has generally been stuck below $25 since.