TiVo Q1 Tops Street, Outlook Strong; Shares Up 5%

(RTTNews) - Set-top box maker TiVo Inc. (TIVO), Tuesday reported a slight drop in profit for the first quarter despite an increase in revenue, as its bottom line was impacted by a one-time interest expense. Nevertheless, both earnings and revenues for the quarter trumped Wall Street estimates, on subscription growth, sending shares up five percent.

TiVo added 285,000 subscribers in the quarter, at the end of which TiVo had 5.8 million subscribers, up 27 percent from a year ago. Churn rate for the quarter was 1.4 percent, unchanged from last year.

San Jose, California-based TiVo's first-quarter profit dropped to $7.9 million or $0.08 per share from $8.1 million or $0.07 per share last year.

The quarter includes $1.8 million of tax affected interest expense for the convertible notes issued in September 2014. Excluding the item, net income would have been up almost 20 percent year over year.

On average, 13 analysts polled by Thomson Reuters expected earnings of $0.07 per share for the quarter. Analysts' typically exclude one-time items.

Net revenues for the quarter rose to $114.7 million from $107.1 million last year. Service and technology revenues that excludes hardware sales, rose to $92.4 million from $86.0 million last year, topping analysts' consensus of $91.35 million.

Looking forward to the second quarter, TiVo projects service and technology revenue of $94 million to $97 million. Analysts currently expect revenues of $93.61 million for the second quarter.

"We believe we are well placed to drive strong long-term operating and financial results, to invest in innovation to build on our solid competitive position, and to drive shareholder value through our buyback authorization," CEO Tom Rogers said.

TIVO closed Tuesday's trading at $10.36, down $0.27 or 2.54%, on the Nasdaq. The stock, however, gained $0.54 or 5.21% in the after-hours trade.