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TiVo Widens Loss

Priya Ganapati

TiVo (TIVO Quote) posted a wider-than-expected loss in the second quarter because of an inventory-related writedown.

The Alviso, Calif.-based digital video-recorder company on Wednesday said it lost $17.7 million, or 18 cents a share, during the quarter, compared with profit of $6.45 million, or 7 cents a share, the year before.

Income included a combined inventory writedown and inventory purchase commitment charge of $11.2 million.

Analysts were expecting a loss of 5 cents a share, excluding the inventory writedown.

Revenue increased to $62.7 million, from $59.3 million for the same period last year.

Analysts polled by Thomson Financial were expecting revenue of $58.41 million.

Shares of the company lost 15 cents, or 2.4%, to $6.05 in recent after-hours trading.

The $11.2 million writedown of the parts wasn't anticipated at the time the company stated its fiscal 2008 goals, TiVo said in a statement.

TiVo said that going forward, it "continues to expect that a shift away from hardware subsidies towards a more advertising-centric marketing approach will continue to have a positive impact on the company's financial profile as compared to last year."

For the third quarter, TiVo expects service and technology revenue in the range of $56 million to $57 million and a net loss in the range of $14 million to $17 million.

TiVo-owned subscription gross additions totaled 41,000, compared with 74,000 a year ago, adversely affected "by the pace at which retailers moved to sell high-definition" DVRs, the company said. TiVo added 136,000 new subscribers in the quarter.

As expected, TiVo reported a net decline in DirecTV TiVo subscriptions in the quarter attributable to DirecTV "no longer deploying new TiVo boxes," it said.

TiVo also said it will start rolling out its service for Comcast(CMCSA Quote) "shortly."

The implementation will happen throughout the fall in Comcast's New England division, said TiVo.

Comcast has also agreed to fund significant additional development work to bring the TiVo service to other Comcast platforms, including Scientific Atlanta set-top boxes, said TiVo.