Earnings Preview: TiVo - Analyst Blog

By
A A A

TiVo Inc. ( TIVO ) is scheduled to release its fiscal third quarter 2013 results after market closes on November 28, 2012. In the run up to the earnings release we do not notice any movement in the analysts' estimates.

Previous Quarter Highlights

TiVo's second quarter loss of 23 cents came in line with the Zacks Consensus Estimate, but it widened from the year-ago period. Top line increased 6.7% year over year to $65.3 million, but fell short of the Zacks Consensus Estimate of $67.0 million. The strong growth was primarily driven by higher Service and Technology revenue.

For the third quarter of 2013, TiVo expects service and technology revenues in the range of $57 million to $59 million. TiVo expects net loss in the range of $27.0 million to $29.0 million and an adjusted EBITDA loss in the range of ($14.0) million to ($16.0) million. Litigation costs are expected to hurt EBITDA in the upcoming quarter.

For further details please read: TiVo Reports Dismal 2Q

Estimate Revision Trend

Over the past 30 days, none of the 6 analysts covering the stock revised their estimates in either direction. Thus, the Zacks Consensus Estimate for the third quarter remained at a loss of 23 cents, couple of cents wider than TiVo's year-ago loss of 21 cents.

Analysts expect the recent partnerships with Mediacom and Midcontinent to well compliment the company's focus on partnerships and strategic alliances to drive subscriber growth. Moreover, the $250.4 million patent litigation settlement with Verizon Communications Inc. ( VZ ) will also be a positive factor for the company. It not only ensures a recurring revenue stream but also validates TiVo's patents.

Recommendation

We remain optimistic about TiVo's growth potential owing to new partnerships, product launches and international expansion opportunities. We believe that TiVo will continue to witness subscriber growth based on its partnerships with Virgin Media Inc. ( VMED ), Comcast Corp. ( CMCSA ), Suddenlink and several other multiple system operators ("MSO"). Moreover, the successful monetization of patents also ensures recurring revenue stream for the company.

However, pending patent litigation issues, rising R&D costs, and higher hardware and sales & marketing costs are expected to impact TiVo's profitability in the short term. Increasing competition from cable and satellite providers could also hurt profitability over the long term.

Thus, we have a Neutral recommendation on TiVo over the long term. Currently, TiVo has a Zacks #2 Rank, which implies a 'Buy' rating for the short term.



COMCAST CORP A (CMCSA): Free Stock Analysis Report

TIVO INC (TIVO): Free Stock Analysis Report

VIRGIN MEDIA (VMED): Free Stock Analysis Report

VERIZON COMM (VZ): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CMCSA , TIVO , VMED , VZ

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Tiny Homes With Big Appeal
Tiny Homes With Big Appeal          

Stocks

Referenced

Most Active by Volume

270,887,127
    $93.89 unch
225,243,115
  • $40.93 ▼ 2.74%
135,900,109
  • $47.52 ▲ 1.80%
89,467,924
  • $5.35 ▼ 1.11%
85,105,358
  • $16.95 ▼ 0.53%
80,748,539
  • $39.80 ▼ 4.21%
68,491,586
  • $3.57 ▼ 1.79%
62,097,356
  • $100.96 ▼ 0.82%
As of 9/19/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com