Post by dkennedy on May 31, 2005 7:30:20 GMT -5
New subscribers, uncashed rebates help TiVo cut loss
Thu, May. 26, 2005
SAN JOSE, Calif. (AP) - TiVo Inc., whose digital video recorders allow commercial-free TV viewing, exceeded Wall Street expectations and saw its quarterly loss shrink thanks in part to thousands of new subscribers who failed to cash in their $100 rebates.
Alviso-based TiVo announced Thursday a fiscal first-quarter loss of $857,000, or 1 cent per share, compared with a loss of $9.07 million or 11 cents per share in the same period of 2004.
TiVo reported revenue for the quarter of $46.9 million, up 36 percent from $34.5 million in the year-ago period.
Analysts surveyed by Thomson Financial expected Tivo to lose an average of 11 cents per share on revenue of $37 million.
The loss was dramatically smaller than expected partly because of new customers who inexplicably didn't turn in their rebates. By some estimates, as many as 50,000 people didn't turn in the coupons, saving the company around $5 million.
"How bizarre is that?'' said Rob Sanderson, analyst with American Technology Research, one of the analysts who expressed confusion over TiVo's unexpected windfall during the company's conference call with analysts.
In the past, TiVo has attempted to attract new subscribers by offering steep discounts and rebates on its set-top boxes. The company offered a $100 rebate during the past quarter. Although rebates attract reluctant subscribers with cut-rate deals, they also erode profits.
Mike Ramsay, TiVo's chairman and chief executive, said the company is not planning to offer rebates in the current quarter and gains from unredeemed rebates were likely a one-time phenomenon.
For the fiscal year, analysts expect the company to lose 23 cents per share on revenue of $166.96 million. The company has said it hopes to reach profitability by the last quarter of the current fiscal year.
Tivo executives said they slashed some expenses more than they had anticipated, including a $1.2 million reduction of costs associated with making set-top boxes.
But analysts said the company can cut costs further -- particularly advertising and marketing expenses. TiVo spent $6.8 million on sales and marketing initiatives in the quarter, up from $5.6 million in the year-ago quarter.
"They have the power to become profitable just by shutting off their marketing,'' Sanderson said. "The big question is if they reach profitability without growing, how much is the company going to be worth to investors.''
Shares of TiVo rose 22 cents, or 3.3 percent, to close at $6.94 on the Nasdaq Stock Market before the report was released. In after-hours trading, the stock gained $1.10, or 15.9 percent, to $8.04.
Members of Tivo's subscription service use their set-top box to digitally record TV shows. The service, which has more than 3.3 million subscribers, makes it easier to record, jump forward or back and bypass any content they wish.
TiVo picked up 319,000 new subscribers during the quarter, greatly exceeding executives' previous forecast of 265,000 to 300,000 new customers. Most of them came from TiVo partner DirecTV, a satellite provider.
But the TiVo-DirecTV deal has risks. DirecTV plans to offer its own recording device to customers and can opt out of the TiVo relationship after February 2007.
In March, TiVo announced a deal with Comcast Corp., the nation's largest cable TV system operator, to adapt the popular recorders for Comcast subscribers.
Thu, May. 26, 2005
SAN JOSE, Calif. (AP) - TiVo Inc., whose digital video recorders allow commercial-free TV viewing, exceeded Wall Street expectations and saw its quarterly loss shrink thanks in part to thousands of new subscribers who failed to cash in their $100 rebates.
Alviso-based TiVo announced Thursday a fiscal first-quarter loss of $857,000, or 1 cent per share, compared with a loss of $9.07 million or 11 cents per share in the same period of 2004.
TiVo reported revenue for the quarter of $46.9 million, up 36 percent from $34.5 million in the year-ago period.
Analysts surveyed by Thomson Financial expected Tivo to lose an average of 11 cents per share on revenue of $37 million.
The loss was dramatically smaller than expected partly because of new customers who inexplicably didn't turn in their rebates. By some estimates, as many as 50,000 people didn't turn in the coupons, saving the company around $5 million.
"How bizarre is that?'' said Rob Sanderson, analyst with American Technology Research, one of the analysts who expressed confusion over TiVo's unexpected windfall during the company's conference call with analysts.
In the past, TiVo has attempted to attract new subscribers by offering steep discounts and rebates on its set-top boxes. The company offered a $100 rebate during the past quarter. Although rebates attract reluctant subscribers with cut-rate deals, they also erode profits.
Mike Ramsay, TiVo's chairman and chief executive, said the company is not planning to offer rebates in the current quarter and gains from unredeemed rebates were likely a one-time phenomenon.
For the fiscal year, analysts expect the company to lose 23 cents per share on revenue of $166.96 million. The company has said it hopes to reach profitability by the last quarter of the current fiscal year.
Tivo executives said they slashed some expenses more than they had anticipated, including a $1.2 million reduction of costs associated with making set-top boxes.
But analysts said the company can cut costs further -- particularly advertising and marketing expenses. TiVo spent $6.8 million on sales and marketing initiatives in the quarter, up from $5.6 million in the year-ago quarter.
"They have the power to become profitable just by shutting off their marketing,'' Sanderson said. "The big question is if they reach profitability without growing, how much is the company going to be worth to investors.''
Shares of TiVo rose 22 cents, or 3.3 percent, to close at $6.94 on the Nasdaq Stock Market before the report was released. In after-hours trading, the stock gained $1.10, or 15.9 percent, to $8.04.
Members of Tivo's subscription service use their set-top box to digitally record TV shows. The service, which has more than 3.3 million subscribers, makes it easier to record, jump forward or back and bypass any content they wish.
TiVo picked up 319,000 new subscribers during the quarter, greatly exceeding executives' previous forecast of 265,000 to 300,000 new customers. Most of them came from TiVo partner DirecTV, a satellite provider.
But the TiVo-DirecTV deal has risks. DirecTV plans to offer its own recording device to customers and can opt out of the TiVo relationship after February 2007.
In March, TiVo announced a deal with Comcast Corp., the nation's largest cable TV system operator, to adapt the popular recorders for Comcast subscribers.