UPDATE 2-Rosetta Stone sees 2nd-qtr loss; shares tumble

Mon May 11, 2009 6:32pm EDT

* Sees Q2 GAAP loss

* Sees Q2 non-GAAP EPS $0.14-$0.16

* Reports Q1 adj EPS of 20 cents

* Q1 revenue up 41 pct

* Shares tumble as much as 14 percent in after-hours trade (Adds details from conference call, shares)

May 11 (Reuters) - Recently public Rosetta Stone Inc (RST.N), a provider of software that helps users learn new languages, forecast a second-quarter loss due to a charge.

Its shares tumbled as much as $4.12, or 14 percent, to $25.35 in after-hours trade. The stock closed at $29.47 Monday on the New York Stock Exchange.

The company would incur a one-time compensation charge of associated with stock grants to key employees, Chief Financial Officer Brian Helman said in its first conference call since it went public last month. [ID:nWNAB7702]

Rosetta expects to post a second-quarter loss of 42 cents to 44 cents a share on revenue of $53 million to $55 million. Excluding the charge, it forecast earnings of 14 cents to 16 cents a share.

Its initial public offering had one of the strongest starts of a new stock in nearly a year.

The company has attracted attention through an advertising campaign that has featured U.S. Olympic swimming gold medalist Michael Phelps.

For the first quarter, it reported a higher quarterly profit, helped by strong revenue growth across segments, continued market share gains and expanding profitability margins.

Rosetta recorded a 41 percent rise at its consumer business and a 43 percent rise at its institutional segment.

The company generates 94 percent of revenue from the United States, which grew 42 percent in the quarter.

First-quarter net income was $3.2 million, or 19 cents per share, compared with a net loss of $432,000, a year earlier. Excluding items, it earned 20 cents a share. [ID:nWNAB7582]

Revenue rose 41 percent to $50.3 million.

Rosetta provides instruction services in 31 languages to individuals, companies and schools primarily through CD-ROMs. (Reporting by Shrutika Verma, S. John Tilak in Bangalore; Editing by Jarshad Kakkrakandy)

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