TiVo's fourth-quarter loss narrows on lower costs

Tue, 03/03/2009 - 7:35am
Deborah Yao, AP Business Writer

(AP) – TiVo Inc. reported a narrower loss in the fourth quarter on Monday as lower costs buoyed the bottom line in the face of a 20 percent drop in revenue.

The Alviso, Calif.-based maker of digital video recorders (DVRs) with time-shifting technology lost $3.6 million, or 4 cents per share, compared with a loss of $6.4 million, or 6 cents, in the same quarter a year earlier.

Revenue for the fourth quarter of fiscal 2009 came to $59.2 million, down from $74.1 million. The results beat the average forecast of analysts polled by Thomson Reuters, which had expected a loss of 10 cents per share on revenue of $54.7 million.

Adjusted earnings before interest, taxes, depreciation and amortization was $2.5 million, up from $900,000 in the prior year's quarter. The adjusted profit also excludes stock-based compensation expenses.

"All facets of consumer spending have been adversely affected," Chief Executive Tom Rogers said in a conference call with analysts, citing the weak U.S. economy. "We're not sure when the environment is going to improve."

For the year, TiVo had net income of $104 million, or $1.03 per share, compared with a loss of $31.6 million, or 32 cents per share. The recently concluded quarter's results include a litigation award of $87.8 million from a patent lawsuit with Dish Network Corp., as well as $18.6 million in interest income, most of which was related to the lawsuit.

Revenue was $249.7 million, down from $272.7 million. Analysts were expecting a 95-cent per share profit and revenue of $209 million.

Adjusted EBITDA was $120 million, compared with a loss of $3 million in fiscal 2008.

Looking ahead, TiVo said it expects a net loss of $6 million to $8 million in the first quarter, with adjusted EBITDA coming in at breakeven to $2 million.

Service and technology revenue – which comprised 82 percent of total revenue in the fourth quarter – should come in at $47 million to $49 million in the first quarter, the company said.

TiVo has inked deals to incorporate its software into digital video recorders deployed by Comcast Corp., DirecTV Group Inc. and Cox Communications Inc. It's also in partnership with Netflix Inc. to stream shows and movies to DVRs.

Comcast is rolling out a free TiVo service to its high-definition (HD), triple-play customers in the New England area. It used to charge $2.95 per month for TiVo on top of the DVR fee.

"Once they expand into a larger market, I think that would be a pretty meaningful positive for TiVo in terms of driving incremental subscribers," said Mark Harding, an analyst at Maxim Group.

In addition, TiVo has direct subscribers to its service. The company ended the quarter with 3.3 million total subscribers, of which half are direct TiVo customers.

Shares of TiVo fell 49 cents, or 7 percent, to $6.60 on Monday. The company released its earnings report after the market's close. The stock rebounded 62 cents, or 9.4 percent, to $7.22 in after-hours trading.

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