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TiVo Loss Narrows

The shares are hammered on soft fourth-quarter sales guidance.
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(TIVO) - Get Free Report

third-quarter loss narrowed 46% from a year ago, and the company beat estimates on the top and bottom line. Fourth-quarter revenue guidance was slightly soft, however.

The digital recorder company lost $14.2 million, or 17 cents a share, in the quarter ended Oct. 31, compared with a loss of $26 million, or 33 cents a share, a year ago. Net revenue rose 30% from last year to $49.6 million, while service and technology revenue rose 52% to $43.2 million.

Analysts surveyed by Thomson First Call were forecasting a loss of 23 cents a share on service and technology revenue of $41.2 million in the latest quarter.

TiVo's total subscribers rose 74% to 4 million at Oct. 31, slightly ahead of forecasts. Overall, the company added a net 434,000 subscribers in the quarter, up from 419,000 net additions in the year-ago period.

TiVo-owned net subscriber additions, however, fell to 55,000 in the quarter, from 103,000 a year ago. Subscriptions to TiVo services offered over DirecTV were 379,000 compared with 316,000 a year ago.

"Three factors affected our results: more cable competition, a far greater increase in DirecTV subscriptions following a rebate program that offered an effectively free TiVo DVR, and our own marketing program that started well into the quarter compared to the full quarter last year," the company said. "Given these circumstances, and the investment we made in the testing of and learning from various marketing initiatives during the third quarter, we believe these results demonstrate reasonable progress."

For the current fourth quarter, TiVo expects to lose $17 million to $22 million on service and technology revenue of $43.5 million to $45.5 million. Analysts were forecasting a loss of $23.1 million on sales of $47.17 million.

The stock fell 61 cents, or 10.7%, to $5.12 after the earnings were released.