TiVo Shows Less Red Ink

The DVR outfit narrowed its quarterly loss on a jump in revenues

TiVo (TIVO) is making headway in its struggle to profit from selling a service that allows users to store TV shows and zip through commercials. Investors bought the stock on Mar. 7 after news of its better than expected financial results for the three months ended Jan. 31.

The Alviso (Calif.)-based company's net loss was only $18.7 million in the January quarter, compared to a net loss of $21.1 million in the year-ago quarter, according to a press release late March 7. TiVo's Service and Technology revenues increased 22% year-over-year to $57.4 million in the Jan. quarter.

Investors had expected worse -- the consensus estimate was for 36 per share lost during the January quarter, according to Thomson Financial. Instead, TiVo actually lost only 19 cents per share. The stock gained 3.4% to $6.14 per share on the Nasdaq in regular session Mar. 7, though it was little changed in aftermarket trading.

TiVo has been taking important steps recently to make the Internet a boon for its business. In February, TiVo announced a plan to let people buy or rent videos on Amazon.com (AMZN) and download them to their TiVos. The two companies' joint service "Amazon Unbox on TiVo" makes it possible for people to access digital content online that they can watch on their TVs instead of computer screens. Then on March 6 TiVo announced an agreement with EarthLink Inc. (ELNK) to distribute TiVo as part of a package with Earthlink's broadband Internet product.

So far TiVo's subscriptions as of January 31, 2007 were up slightly from last quarter to 4.4 million.

The company also said it had "strengthened [its] intellectual property position" with a victory against EchoStar (DISH) in its patent lawsuit against the satellite TV outfit. However, in October, a federal appeals court granted EchoStar's request to stay a permanent injunction imposed by a lower court that would have prevented EchoStar from making, using, or selling certain digital video recorders (DVR) in the U.S.