TiVo: Despite weak outlook, shares rise

One thing Americans can't live without is TV, DVR, and of course TiVo Inc. (NASDAQ:TIVO).  Shares of TIVO are up 5% today, and despite the weak outlook their 3.6 million subscribers, compared with 4.2 million a year ago keep the money coming in.

Average subscriber acquisition cost was $135 in the fiscal second quarter, which ended July 31, slightly up from $116 in the previous period and significantly lower than the $758 in the year-ago period

Tivo reported $2.9 million in net income, or 3 cents per share. TiVo had posted a loss of $17.7 million, or 18 cents a share, in the same period last year, and analysts had expected a loss of 2 cents per share in the past quarter.

For the six months ending July 31, TiVo had $126 million in revenue, up 2 percent from the same period last year. It posted $6.6 million in net income, or 6 cents per share, compared with a loss of $17 million, or 17 cents per share, in the year-ago period.

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The company said its revenue for services and technology will be at $49 million to $51 million in the current quarter. Analysts polled by Thomson Reuters had expected $57 million, close to the $58 million posted in the third quarter of 2007. TiVo also said it expected a net loss in the range of $7 million to $9 million in this quarter.

During a conference call, interim Chief Financial Officer Cal Hoagland said TiVo will face increased expenses in the current quarter, including holiday-related marketing and costs related to an ongoing patent battle with Dish Network Corp. A Sept. 4 court date has been set as TiVo seeks to collect on the $94 million it has been awarded in damages.

Analyst Mark Harding of the Maxim Group said TiVo management typically "has guided below expectation and then decidedly exceeded" it when posting actual results. He said TiVo's finances look positive, though questions remain on how much marketing TiVo should be expected to do in the holiday season given its pledge to reduce those costs.

One thing the Masters liked, TiVo said distribution partner Comcast Corp. (nasdaq: CMCSA) has expanded a TiVo package to Connecticut, beyond an initial deployment in Massachusetts and New Hampshire.  A full marketing should begin this year, allowing TiVo to boost subscribers while Comcast bears much of the marketing expenses.

Deployment by another cable partner, Cox Communications Inc., should also begin by year's end, while Seven Media Group has introduced TiVo to the Australian market.

Keep in mind Tivo shares have a 20% short float, so keep that in mind if you've made any big gains this week owning shares.  The time to own TIVO shares was earlier this week, now that the stock is up 11% since Tuesday, best to stand back and let the dust settle before making any new positions.

SOURCE: http://www.forbes.com/feeds/ap/2008/08/28/ap5365921.html