Friday, February 25, 2011

TiVo Inc. (NASDAQ: TIVO): Q4 Earnings Preview 2010

TiVo Inc. (NASDAQ: TIVO) is scheduled to release its fourth-quarter financial results after the closing bell on Tuesday, March 1, 2011. Analysts, on average, expect the company to post a loss of 28 cents per share on revenue of $41.02 million. In the year ago quarter, the company posted a loss of 9 cents per share on revenue of $45.26 million.

TiVo Inc., together with its subsidiaries, provides television technology and services that include digital video recorders (DVRs) in the United States and internationally. The company offers subscription-based TiVo service, which enhances home entertainment by providing consumers with a way to record, watch, and control live television, as well as enables to receive movies and television shows from cable, broadcast, and broadband sources in one interface. 

In the preceding third quarter, the Alviso, California based company's net loss was $20.6 million, or 18 cents a share, compared to a loss of $6.48 million, or 6 cents a share, in the year-earlier quarter. Revenue declined to $41.3 million from $42.1 million in the same quarter last year. Analysts, on average, had expected the company to post a loss of 17 cents per share on revenue of $41.41 million. 

At its last earnings call in November, TiVo said that it anticipates service and technology revenues in the range of $40 million to $42 million, a net loss in the range of $32 million to $4) million, and an Adjusted EBITDA loss in the range of $24 million to $26 million. TIVO expected the holiday pricing change to impact fourth-quarter earnings by about $8 million to $10 million. TIVO expects fiscal 2012 adjusted EBITDA to be well below the fourth quarter run rate.

It appears that TiVo’s value is correlated far more to disputes over patent infringements rather than fundamentals, as operationally TiVo is expected to lose money both this year and the next. The company has been involved in patent infringement litigation with DISH Network (NASDAQ: DISH) and Echostar (NASDAQ: SATS) since 2004.  Late in November, TiVo said that it expected a decision from the appeals court in the next few months. In a conference call with analysts, the company said it could collect $300 million if it wins the court case.

The company continues to strike new agreements with multiple system operators around the world. Recently, TiVo announced that it has inked a multi-year deal with Charter Communications (NASDAQ: CHTR) that will make TiVo services available in Charter markets later this year. Charter, the nation's fourth-largest cable operator, signed with TiVo as it looks to integrate Web content, recorded TV and video on demand with its traditional cable television service.

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