TiVo Takes a Fall

The stock moves lower after a mixed earnings report.
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Updated from Nov. 29

Shares of

TiVo

(TIVO) - Get Report

moved lower Thursday, a day after the company said boosted subscriptions and narrowed its third-quarter loss, but missed expectations for its top-line results and guidance.

Shares were recently off nearly 10% to $5.67 in recent trading.

TiVo said Wednesday that service and technology revenue rose 22% to $52.61 million for the quarter ended Oct. 31, compared with analysts expectations of $55.6 million.

The company lost $11.1 million, or 12 cents a share, compared with a loss of $14.2 million, or 17 cents a share a year earlier.

Analysts were expecting a loss of 14 cents a share.

Gross subscription addition growth was positive for the first time on a year-over-year basis in six quarters, said Tom Rogers, CEO of TiVo, in a press release.

Overall, TiVo-owned subscriptions were up 24% year over year to 1.6 million. "We were able to build momentum relative to last year, with TiVo-owned subscription gross addition growth up 10% at 101,000 compared to 92,000 in the third quarter of last year," said Rogers.

TiVo also reported a net decline in the number of DirecTV TiVo subscriptions during the period as DirecTV deployed fewer TiVo boxes. Cumulative total subscriptions as of Oct. 31, were up slightly from last quarter to 4.4 million, and up 11% over the year-ago subscription totals.

For the fourth quarter, TiVo said it expects service and technology revenue in the range of $54 million to $55 million, and a loss of $33 million to $38 million. Analysts had been expecting service and technology revenue of $61.2 million.

The wider loss is because of the increased hardware rebate across retail store offerings, which represent the greater volume of sales due to the holidays, said TiVo.

TiVo is also examining its pricing model. Earlier this month, the company introduced new hardware pricing for the single-tuner hardware, making it free after mail-in rebate and for a reduced fee after mail-in rebate for the dual-tuner hardware. It has also standardized the prices across online and retail to make it easier to advertise the product across different mediums.

Following the holiday period, the company said it will evaluate the success generated by this kind of hardware pricing approach.

TiVo also entered into an international distribution agreement with Cablevision Mexico, the largest cable operator in Mexico City, which is owned by

Televisa

(TV) - Get Report

. It also plans to introduce an advertising and promotion campaign to make clear to users that TiVo is very different from the generic alternatives. The company will introduce a phrase "It's not a TiVo unless it's a TiVo" to cement its brand.