TiVo Q3 Profit Down 49%, Misses Estimates; Sees Q4 Revenue Below View

(RTTNews) - Set-top box maker TiVo Inc. (TIVO) on Tuesday reported a 49 percent decline in profit for the third quarter from last year as a slight increase in revenues was more than offset by incremental interest expense and a tax provision.

Earnings per share for the quarter missed analysts' estimates by a penny, while revenues beat their expectations. Looking ahead, the company forecast revenues for the fourth quarter below Street estimates.

TiVo added 328,000 subscribers in the third quarter, compared with additions of 274,000 in the same period last year. At the end of the third quarter, TiVo had 5.13 million subscribers, up 32 percent from the year-ago period.

Tom Rogers, President and CEO of TiVo, said, "This was a strong quarter for TiVo, highlighted by continued organic growth as well as significant progress establishing a more efficient capital structure. Adjusted EBITDA increased 16% over last year, and our growing relationships with operator partners led to the net addition of 328,000 total TiVo subscriptions, bringing total subscriptions to over 5.1 million, and 37% year-over-year growth in MSO revenue."

San Jose, California-based TiVo's third-quarter net earnings were $6.35 million or $0.06 per share, down from $12.49 million or $0.10 per share in the same period last year. On average, sixteen analysts polled by Thomson Reuters expected the company to report earnings of $0.07 per share for the quarter. Analysts' estimates typically exclude special items.

The latest quarter's results include $0.8 million of after-tax incremental interest expense associated with the company's recent convertible debt offering and a slightly higher than anticipated tax expense.

Net revenues for the quarter edged up less than 1 percent to $118.43 million from $117.26 million in the prior-year period.

But service and technology revenues for the quarter grew 8 percent to $88.06 million from $81.66 million last year. Analysts had a consensus revenue estimate of $87.93 million for the quarter.

Cost of revenues edged down to $49.71 million, while total operating expenses declined 5 percent to $53.12 million.

The latest quarter's results include a provision for income taxes of $7.13 million, compared to a benefit of $2.02 million in the year-ago period.

Looking ahead to the fourth quarter, TiVo forecasts net income of $2 million to $5 million, and service and technology revenues in a range of $87 million to $90 million. Street expects the company to report earnings of $0.07 per share for the quarter on revenues of $90.49 million.

TIVO closed Tuesday's regular trading session at $12.90, down $0.03 or 0.27 percent on a volume of 1.97 million shares. In after-hours, the stock further declined $0.17 or 1.28 percent to $12.70.