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OpenTV sees red in Q4, but revenues climb

Fri, 03/16/2007 - 6:56am
Jeff Baumgartner, CED

OpenTV Corp. posted a Q4 net loss of $3.4 million (3 cents per share), versus a year-ago profit of $2.9 million (2 cents per share). Net income in Q4 2005 reflected a $3.1 million gain related to the sale of an investment in a private company.

Aided by higher middleware shipments, the interactive television software and apps specialist also recorded revenues of $26.7 million, up 10 percent from $24.2 million in the year-ago period. For the year, OpenTV notched revenues of $101.9 million, up 17 percent versus all of 2005.

OpenTV revenues were a touch better than some analyst estimates. Oppenheimer & Co. was expecting revenues of $25.8 million.

"While we were encouraged by middleware growth, we continue to be disappointed by the lack of earnings leverage to their model," said Oppenheimer analyst Alan Bezoza, in a research note. Oppenheimer maintained its "Neutral" rating on the stock. It presently has a "Buy" rating on OpenTV rival NDS Group.

Kudelski Group recently grabbed voting control of OpenTV, a move that is expected to put the company on better competitive footing with NDS. In the wake of that change, Kudelski and NagraStar vet Alan Guggenheim has been named president and CEO of OpenTV.

Former Time Warner Cable CTO Jim Chiddix most recently held the post of chairman and CEO.

OpenTV said its middleware has been deployed in about 81 million set-tops, led by customers such as BSkyB, EchoStar Communications and Sky Italia. Middleware revenues in Q4 jumped from $17.6 million to $21.3 million.

Guggenheim, during an earnings call with analysts, said OpenTV is "charting a course for accelerated growth and profitability over the next three to five years as the opportunities in middleware, advanced advertising and participation technologies unfold."

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