TiVo Profit Clouded by Murky Outlook25 Aug, 2005 By: Erik Gruenwedel
Digital video recording pioneer TiVo posted second-quarter (ended July 31) net income of $240,000, or nil cents per share, compared to a loss of $10.8 million, or 13 cents per share, during the same period last year. It marked the first profit in TiVo's 8-year history.
Spurred by the addition of 214,000 DirecTV satellite subscribers and 40,000 TiVo-direct subscribers, revenue increased 46 percent, to $40.7 million, compared to $27.8 million last year. Total subscribers now total 3.6 million, including 2.3 million associated with DirecTV.
But with DirecTV planning to offer its own DVR device and no longer offer TiVo to new subscribers, TiVo CEO Tom Rogers said the company has to respond with more aggressive marketing of its stand-alone set-top box and distribution deals with cable TV companies.
Indeed, Cablevision Systems Corp. this week said it would begin testing the TiVo DVR with wireless network capability.
“It's no secret to me that there are real challenges TiVo faces as a company,” said Rogers in a call with investors. “The ability to overcome these challenges is there. But near-term, we clearly have some difficulties we have to confront with a clear sense of reality.”
TiVo stock closed down more than 15 percent, to $5.18 per share, as of 4 p.m. today.