TiVo Turns To Profit In Q4, But Misses View

(RTTNews) - Digital video recorder company TiVo Inc. (TIVO) on Wednesday reported a turnaround to profit in the fourth quarter on strong revenue growth as it added more subscribers. However, earnings per share for the quarter missed analysts' expectations.

Looking ahead, TiVo forecast a sequential increase in service and technology revenue for the first quarter, but below Street estimates. In addition, the company announced an increase of $100 million to its stock repurchase authorization.

TiVo provides software and service technology that enables the distribution of video content on digital video recorders, non-DVR set-top boxes, computers and other devices.

The Alviso, California-based company's net income for the fourth quarter was $710 thousand or $0.01 per share, compared to net loss of $15.8 million or $0.13 per share in the year-ago period. The latest quarter's results included an unanticipated non-cash charge of $4.8 million relating to the TRA business.

On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.04 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter climbed 20 percent to $106.33 million from $88.86 million in the same period last year.

Service and technology revenue rose to $84.04 million from $65.72 million in the same period last year, but came in slightly below analysts' expectations of $84.12 million.

TiVo said its subscriptions currently stand at about 4.21 million, up 34 percent year-over-year, led by 313,000 cable MSO additions. This compares to cable MSO additions of 222,000 in the prior-year period. Total subscription net additions in the quarter were 319,000, compared to 209,000 in the year-ago quarter.

TiVo-owned ARPU per month declined to $8.56 from $8.76 in the year-ago period, while TiVo-owned churn rate per month was flat with last year at negative 1.5 percent.

For fiscal 2014, TiVo's net income was $271.82 million or $1.99 per share, compared to net loss of $5.26 million or $0.04 per share in the prior year. Net revenues for the year grew to $406.25 million from $303.91 million last year.

Street expected the company to earn $2.07 per share for the year on revenues of $304.93 million.

Looking ahead to the first quarter, TiVo forecasts net income of $5 million to $8 million, a sequential increase from the preceding fourth quarter of fiscal 2014. The company expects the increase to come from improvements to overall gross margin and lower operating expenses.

The company also projects service and technology revenue for the quarter of $85 million to $87 million, the midpoint of which is a 40 percent year-over-year increase from the $61.8 million reported in the year-ago period. Analysts expect earnings of $0.08 per share for the quarter on revenues of $87.59 million.

TiVo announced an increase of $100 million to its stock repurchase authorization, giving it about $186 million of unused repurchase capacity beyond the $20 million of stock it repurchased during the fourth quarter. The company said it intends to repurchase $100 million in first quarter of fiscal 2015.

TiVo noted that Comcast Corp. (CMCSA) plans to expand the integration of Xfinity On Demand to their entire footprint.

Tom Rogers, President and CEO of TiVo, said, "We are also pleased that Comcast has committed to expanding our successful integration of Xfinity On Demand to their entire footprint. This integration on the Roamio and Premiere platforms has been an important one for us, as the robust Xfinity library, along-side traditional TV channels and web content delivers a one-stop shop for home entertainment."

Rogers added that market-by-market rollouts are occurring now, with full scale deployment in all U.S. markets - including Chicago, Atlanta and Houston - expected to be complete by June 30, 2014.

TiVo closed Wednesday's regular trading session at $12.83, down $0.34 or 2.58 percent on a volume of 3.26 million shares.