Earnings Cheat Sheet: TiVo Feeling the Pressure, Shares Drop

TiVo Inc. (TIVO) was once a pioneer in giving tv viewers the ability to pause, record and watch favorite programs at-will. TiVo is proving fast that first-mover advantage does not always last. Competition is fierce in rapidly changing world of technology. In addition to other DVR players, today’s TiVo worries are now Apple TV and the potential emergence of Google TV onto the scene.

Earnings: Decreased to a loss of ($.18) per share, or a loss of $20.6 million, compared to ($.06) per share, or a loss of 6.4 million, in the same period a year ago.

Revenue: Decreased 10.8% to $50.9 million, compared to $57.1 million in the prior year.

Actual versus Wall Street Expectations: The loss of ( $.18) cents per share missed expectations by $.01 cents.  The consensus analyst earnings expectation was a loss of ($.17) cents per share. Revenues fell within the $19-$21 million expected range, but leaned toward the higher side of caution (Thomson Reuters).

Notable Stats: TiVo said it lost 112,000 customers in the third quarter.

TiVo’s percentage of customers who cancel their subscriptions each month rose to 2% from 1.7%.

TiVo forecast a loss of $32 million to $34 million for its fourth quarter.

Did You Hear That? Tom Rogers, President and CEO of TiVo, said, “You might respond to that statement by asking, what about the rise of all those retail gadgets and specialty devices like Apple TV and Google TV. They claim to have the answer to bring in internet content to the television. The answer, they only address a small component of the future television experience.”

Commentary: TiVo has plenty to prove in our eyes. Shares of TiVo have been beaten down since reaching the high teens earlier this year. At the beginning of November, shares hit the 200-day moving average with resistance and took another plunge back below the 50-day moving average also. TiVo’s third quarter report was nothing short of dismal and lacked any real reason to be a buyer of shares. The company is facing more competitive pressure and showing a revenue decline, both cautious signs. Until TiVo eliminates earnings losses and delivers revenue growth, we’ll patiently look to other opportunities in the market.

Disclosure: No positions

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