Earnings: Q2 loss of ($.13) vs. ($.15) consensus and a loss of ($.03 ) in Q2 last year.
Revenue: Decreased 15.9% Year-over-Year from $48.8 Million last year t0 $42.1 Million this year in the same period, versus $41.87 Million consensus, passing expectations.
Tom Rogers, President and CEO of TiVo, stated “TiVo remains on solid financial footing, exceeding our revenue and earnings guidance and with a strong balance sheet of over $240 million in cash and short-term investments, and no debt.”
Comment: Shares of TIVO are trading down 1.71% following the company’s earnings release after-the-bell, trading at $8.32 per share, compared to the closing price of $8.47.
In the chart above, TIVO shares are trading above the 50-day moving average, yet below the 200-day moving average. The company has been plagued by a lawsuit with EchoStar (SATS), but exudes confidence in their ability to win the litigation suit. The proof will reside in the ultimate court decision. Meanwhile, in the 2nd quarter, TIVO inked deals with Suddenlink Communications, the seventh largest U.S. cable operator currently with 1.3 million subscribers, and Cox Communications, the third largest U.S. cable television operator. A key attraction to the stock right now is TIVO’s cash position of over $2 per share and zero debt on their balance sheet. TIVO stock hit a 52-week low in July of this year. Since then, TIVO shares have rebounded and consolidated recently. If TIVO can continue to grow sales while reducing costs, then TIVO shares could become even more compelling than they are today.
Alviso, CA-based TiVo Inc. (NASDAQ: TIVO) delivered Q1 earnings per share of -$.13, beatings analyst consensus estimates by $.03 per share. Q1 net revenue was $61.4M, up compared to $55.1M in the year-ago quarter and the highest Q1 net revenue in three years.
President and CEO of TiVo, Tom Rogers, said “TiVo kicked off the fiscal year on a strong note, exceeding our revenue, net income and Adjusted EBITDA guidance, and maintaining our strong balance sheet of $255 million in cash and short-term investments, and no debt.”
For the first quarter, service and technology revenues were $43.2 million, compared with $48.5 million for the same period last year and $45.3 million in the prior quarter. Additionally, first quarter net revenue was $61.4M; up compared to $55.1M in the year-ago quarter and the highest Q1 net revenue in three years. Adjusted EBITDA was ($6.7) million, compared to guidance of ($9) million to ($11) million, and $5.3 million in the same period a year ago. Increased legal spend as well as research & development expenses relating to new products and distribution were a significant driver in the year-over-year Adjusted EBITDA decline. TiVo reported a net loss of ($14.2) million, compared to guidance of a net loss of ($19) million to ($21) million, and a ($3.9) million net loss in the year-ago quarter. Net loss per share this quarter was ($0.13).
Rogers also stated, “In terms of our strategic alliance with Best Buy (NYSE: BBY), we announced earlier today that development is underway between TiVo and Best Buy’s Insignia brand to integrate TiVo’s software and advanced television services into broadband-connected Insignia televisions. The new Insignia televisions will provide Best Buy customers with an exceptional, intuitive user experience for accessing online content by utilizing our latest non-DVR software, giving the viewer a one-stop-shop for delivering and searching content right on the television. This offering will add to the arsenal of unique approaches that TiVo has to shape the advanced television experience. Whether through the retail box, an operator provisioned box, software built into another box, a software upgrade to someone else’s DVR and non-DVR set-top boxes, and now software built directly into the television set, we are focused on taking numerous alternative means to affecting the television experience and providing a TiVo solution to each.
“We are also making notable progress with our audience research business as TiVo data becomes an increasingly important part of how the media industry evaluates viewership behavior and the effectiveness of ad campaigns. To that end, we recently teamed with Millward Brown, a global leader in marketing research that works with a significant portion of the top 100 global brands, to use TiVo’s audience research capabilities to test commercial effectiveness prior to and throughout its run to help these brands achieve more cost effective media-planning. We believe working with Millward Brown and some of the world’s top brands in this regard opens up a whole new avenue of growth for our audience research business.”
Rogers concluded, “We continue to expand our strategic initiatives demonstrating our potential for broad distribution in many incarnations. Our new broadened advanced television approach with its unique user interface has played a significant part in driving a range of new distribution partners. We remain a financially strong company with exciting growth prospects that will begin to play out in the years ahead, particularly with TiVo at the forefront of innovation and a driving force that defines how television viewers will access and consume content in an ever-changing media landscape.”
Financial Guidance:
For the second quarter of fiscal 2011, TiVo anticipates service and technology revenues in the range of $40 million to $42 million, a net loss in the range of ($17) million to ($19) million, and an Adjusted EBITDA loss in the range of ($9) million to ($11) million. This includes expected increased litigation expense and higher research & development costs due to increased product development and distribution.
TiVo (Nasdaq: TIVO) is lost over 40% of its value after a U.S. Court of Appeals vacated an earlier ruling in a patent case. Now, Dish Network Corp. (Nasdaq: DISH) and EchoStar Corp. (Nasdaq: SATS) are allowed to have their case heard again. The action in TIVO over the past few months is exactly what it looks like to gamble on the legal system:
Coinstar (ticker: CSTR) is fast-becoming an emerging momentum play. The company is approaching a $1 billion enterprise due to their red hot Redbox located at the front of every grocery store all over the country.
Redbox dishes out DVD rentals for only a $1 with plenty of feature titles licensed from Paramount Home Entertainment, a division of Viacom (see: http://www.hauteliving.com/blog/viacom-kicks-off-the-new-decade-with-viable-strength/). Gary Cohen, SVP of Redbox, said, “From road warriors to moms on the run, the iPhone app from Redbox helps customers rent and reserve at any of the thousands of neighborhood locations nationwide.”
Recently, the iPhone app from Redbox surpassed 1 million downloads. Keep a close eye on Coinstar as they steal more business from Blockbuster.
Meanwhile, Netflix (ticker: NFLX) has a market cap over 3 times that of Coinstar. Founder and CEO Reed Hastings possesses the key leadership quality of adaptability — a quality he must have learned while serving in the Peace Corps in his younger days.
His company’s stock has doubled over the past year and grown to serve over 12 million subscribers. Analysts forecast Netflix to double their subscriber base by 2016. A key catalyst is their continuing investment in streaming online movies, ultimately the customer’s next destination for viewership.
On the flip side, Blockbuster (ticker: BBI) was just too late to the online game. The company is now a penny stock! Blockbuster is like an old-fashioned travel agency in the early 90s that didn’t see the Internet boom coming. Eventually, the old-fashioned, traditional travel agencies were run over by online travel agencies like Expedia, Orbitz and Yahoo! Travel. Lesson learned by Blockbuster: adapt to change, otherwise get left behind.
Lastly, keep your eye on TiVo (ticker: TIVO). This week, TiVo announced they are ready to release new DVRs this spring. Unlike the current models, critics are calling the new device a solution to integrating TV and Internet content.
The TiVo Premiere is the answer to the company’s urgency to spark the growth of its stagnant 1.5 million customer base. Price could be an issue, as the new DVRs will range from $299-$499 in addition to required subscription fees ranging from $12.95 a month to $299 for three years.
TiVo CEO Tom Rogers said, “We’re moving toward get anything you want whenever you want it.” A search for Penelope Cruz on the new TiVo DVRs would bring up her movies that are showing soon on TV, available for rental or purchase through Amazon.com (ticker: AMZN), as well as related YouTube videos. Sounds like a convenient one-stop shop library for those willing to pay.
Furthermore, TiVo just won an intellectual property case worth $300 million against EchoStar Communications Corp. (ticker: SATS) the parent company of Dish Network Corp. (ticker: DISH). The win means companies like Comcast Corp. (ticker: CMCSA) and DirecTV (ticker: DTV) must enter into commercial arrangements with TiVo which will yield future licensing fees.
Three new pioneering options are unfolding before our eyes. Which one will you integrate into your experience? Your answer may lead to a great investment.
Disclosure: No positions in the companies mentioned.
To get entry points, stop-loss points, and profit targets for our fresh March watch list stocks and Featured Trade, simply try a 14-day complimentary trial to Wall St. Cheat Sheet Premium by visiting here:
Our partners FusionIQ state: “TiVo Inc. (TIVO) whose service allows viewers to locate and record multiple shows, control live television, choose viewing preferences, and access their customized lineup of shows scored a new high volume, breakout. This breakout comes one day after TIVO scored a new FusionIQ timing BUY signal. With an unbiased point and figure target of $ 16.50 and a 100 FusionIQ technical ranking, TIVO shares look to have solid upside potential if purchased on pullbacks. Fundamentally an imminent settlement with Dish Network (DISH) is an added catalyst that is likely to drive shares.” To learn how you can get an edge trading/investing with FusionIQ’s powerful platform, click here to watch my product review and take advantage of our special Wall St. Cheat Sheet 20% discount.
Corey Rosenbloom, the Technical Analysis Professor, submits: Let’s take a look at the full S&P 500 rally from the March 2009 lows and take a special look at daily readings of Breadth and Comparative Volume to see that Internals surged higher and confirmed the initial rally but lately in an ‘about-face,’ have been failing to confirm the new 2009 price highs. Let’s take an objective look at price and underlying internals. (Source: Afraid to Trade)
Precision Capital Management offers a very cool chart this week as a follow up to our Market Profile column with Tom Alexander: The S&P 500 has recently been up against its most formidable resistance since the start of the 2009 rally. Pictured above is SPY with volume at price (red) beginning at the October 2009 high. The green horizontal line marks halfway between the two greatest points of control, which roughly coincide with VWAP, also anchored from the October 2009 high. The bulls and bears continue to battle it out here as a failure could see price trade down to lower anchored VWAP support at 101.96 or 91.96, and a breakthrough could see price reach the higher point of control at 127.90. We update our readers daily on these and other market developments (free registration here), but will be paying particular attention to this chart. (Source: Precision Capital Management)
Disclosure: No position in TIVO.
Coinstar (ticker: CSTR) is fast-becoming an emerging momentum play. The company is approaching a $1 billion enterprise due to their red hot Redbox located at the front of every grocery store all over the country.
Our partners FusionIQ state: “TiVo Inc. (TIVO) whose service allows viewers to locate and record multiple shows, control live television, choose viewing preferences, and access their customized lineup of shows scored a new high volume, breakout. This breakout comes one day after TIVO scored a new FusionIQ timing BUY signal. With an unbiased point and figure target of $ 16.50 and a 100 FusionIQ technical ranking, TIVO shares look to have solid upside potential if purchased on pullbacks. Fundamentally an imminent settlement with Dish Network (DISH) is an added catalyst that is likely to drive shares.” To learn how you can get an edge trading/investing with FusionIQ’s powerful platform, 
teaches us some signs of a Downtrending Day:
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