TiVo Sues Verizon and AT&T as it Posts 2Q Loss
August 27, 2009
ALVISO, CALIF: Shares
of TiVo fell nearly 7 percent mid-day after the DVR maker posted a
second-quarter loss and cut expectations for its third quarter. TiVo also filed
suit in the United States District Court, Eastern District of Texas against
AT&T Inc. and Verizon Communications for infringing on three of its
TiVo (NASDAQ:TIVO) posted a net loss of $2.9 million on revenues of $57.4 million
for its second fiscal quarter of 2010, ending July 31. For the same period a
year ago, the company had net income of $2.9 million on $65.2 million in
revenues. Earnings before interest, taxes, depreciation and amortization were $5.2
million, better than TiVo’s guidance of a $2 million break-even.
Subscriptions owned by TiVo (rather than third-party providers) increased by a
gross of 31,000 for the quarter, compared to 36,000 a year ago. The churn rate
was about 1.5 percent; TiVo ended the quarter with 1.6 million owned
subscriptions, and 3 million total.
For 3Q10, TiVo expects service and technology revenues of $46 to $48 million.
(Service and technology yielded $48.8 million in 2Q; hardware revenues
accounted for the rest.) Net loss for the upcoming quarter is projected at $8
million to $10 million. Adjusted EBITDA is once again expected to come in
break-even at $2 million.
Reuters Estimates expected service and tech revenues to come in at $47
million, with net income of $5.11 million and EBITDA of $1.43 million. Shares
of the company dropped from $10.60 to $9.78 during morning trading but inched
back above $10 at mid-day.
The patents at issue in TiVo’s pursuit of the big telcoTV providers cover its
Multimedia Time Warping System, Time-Shifting Multimedia Content Stream System,
and its Automatic Playback Overshoot Correction System.
The complaints seek damages for past infringement and a permanent injunction,
similar to one issued by the same court against Dish Network and its satellite
coverage of TiVo:
July 2, 2009: “Dish Network got a break last night when a federal court extended the
company’s ability to use the digital recording function in its set-top
receivers. A lower court had ruled in early June that the recording function
violated patents belonging to TiVo, and that it had to be disabled. Dish Gets
a Break in TiVo Ruling”
July 13, 2009: “TiVo is tossing in with Best Buy to sell its digital video recorders. The
announcement comes after a recent court ruling allowing Dish Network to
continue using digital video recording technology similar to TiVo’s. TiVo Teams
with Best Buy”
June 4, 2009: “ Court Puts TiVo’s Dish
Defeat on Hold”
A federal appeals court issued a temporary stay yesterday on a lower-court
decision issued Tuesday in favor of TiVo.
January 14, 2009: “ DBS Operator Continues
Patent Spat with TiVo”
The folks at the Dish Network (NASDAQ: DISH) have managed to get the patent
police to take another look at TiVo’s time-shifting patent. TiVo and Dish have
fought for years over the technology, which TiVo pioneered in its eponymous
boxes in the 1990s. Dish eventually incorporated the function into its own
set-top boxes, setting off a patent dispute between the two companies.
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