By Maria Armental
TiVo Inc. said its profit surged in the fourth quarter as the
pioneering TV-recording company continued to expand its customer
base through more distribution deals with cable and satellite
companies.
Total subscriptions reached more than 5.5 million as of Jan. 31,
as TiVo added 340,000 subscriptions in the latest period. TiVo's
paid-subscriber churn rate, or the percentage of people that
terminated its service, was 1.5%, unchanged from the year-ago
period.
Results topped the company's projection and the Wall Street
consensus, sending shares up more than 6% to $11.93 in recent
after-hours trading.
For the current quarter, TiVo projected net income of $5 million
to $8 million and $90 million to $92 million in service and
technology revenue, compared with the consensus of $10.1 million in
net income and $92.3 million, according to analysts surveyed by
Thomson Reuters.
Increasing competition from pay-TV carriers' on-demand services
as well as video-streaming services, like Netflix Inc., have
pressured the company's customer base.
The San Jose, Calif., company, which last month bought defunct
TV-streaming service Aereo Inc.'s trademark and customer lists at
bankruptcy auction, responded by reaching distribution agreements
with some of those providers, expanding its customer base, and
adding products like cloud-based media services and an over-the-air
recording service.
On Tuesday, TiVo announced a distribution agreement with
Frontier Communications, its first foray into the telecom industry.
Under the agreement, Frontier would offer TiVo over-the-air DVR
services to broadband customers, with an initial rollout expected
in midyear. Frontier last month announced plans to buy Verizon
Communications Inc.'s landline customers in Florida, California and
Texas.
For the three months ended Jan. 31, TiVo reported a profit of
$7.1 million, or seven cents a share, up from $710,000, or a penny
a share, a year earlier.
Net revenue rose 7% to $114.1 million, while services and
technology revenue, a closely watched metric that excludes hardware
sales, increased 9% to $91.7 million.
TiVo had projected a profit of $2 million to $5 million and
service-and-technology revenue of $87 million to $90 million.
Gross margin narrowed to 58% from 59.3% a year earlier.
Through Tuesday's close, the company's stock had fallen 16% over
the past 12 months.
Write to Maria Armental at maria.armental@wsj.com
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