Tivo Loss Narrows Amid Lower Costs

TiVo Inc. (TIVO), a developer of television recording technology, Thursday posted a significantly narrower quarterly loss on increased subscribers and lower costs, and the stock rose 15 percent.

TiVo, whose digital video recording service lets users pause live TV and save massive amounts of programming, also said it expects to be profitable by the fourth quarter of its fiscal year, which ends in January 2006.

For the period ended April 30, it posted a net loss of $857,000, or 1 cent a share, compared with a net loss of $9.1 million, or 11 cents a share in the year ago period.

Service and technology revenues for the quarter increased 59 percent to $40.0 million. Total revenue, including hardware sales, climbed to $46.9 million, from $34.5 million.

Analysts were expecting a loss of 9 cents a share, on revenue of $38.4 million, according to Reuters Estimates.

TiVo added a total of 319,000 subscribers in the quarter. So-called "TiVo-owned" customers, whom the company gains outside of its partnership with satellite TV provider DirecTV Group Inc. (search) , rose by 72,000. In all, TiVo ended the quarter at 3.3 million subscribers.

The company said its spending on expenses such as rebates, which help lower the cost of units that customers buy at retail stores, fell to $3.6 million, from $5.0 million.

The rosy results come only months after some analysts said they doubted TiVo's future as a viable enterprise, due to growing competition from cable providers and its expensive drive to boost subscribers. Since then, the company has reeled in spending and signed a key distribution deal with Comcast Corp. (CMCSA), the No.1 cable TV provider.

Wall Street analysts said they were impressed by the solid growth in subscribers, whose recurrent fees of up to $13 per month increase TiVo's revenue.

"They were in line with their subscriber guidance and spent a lot less than they expected, so they are getting some efficiencies on their marketing," said analyst Rob Sanderson of American Technology Research.

Looking ahead, TiVo said it sees second-quarter growth of 40,000 to 60,000 "TiVo-owned" subscribers, and a total increase of 200,000 to 260,000 new users.

In addition, it narrowed its fiscal 2006 guidance to a loss of $10.0 million to $20.0 million, from its previous range of $10 million to $25 million, and reiterated its range for service and technology revenues to $155.0 million to $165.0 million.

Michael Ramsay, who said earlier this year that he would step down as chief executive once a new one is found, said that TiVo is still searching for a CEO. In the meantime, Ramsay told analysts on a conference call that he feels "fully in charge."

TiVo shares climbed to $7.98 on the Inet electronic brokerage, from its Nasdaq close of $6.94.