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Cable Technology Feature Article

March 02, 2011

TiVo Reports a Much Wider Fourth Quarter Loss than Expected

By Charles West, TMCnet Web Editor

TiVo, a digital video recorder company which provides an electronic television programming schedule as one of its key features, reported a much wider fourth quarter loss than expected.

The company's fourth-quarter results were hurt in part by mounting legal costs. TiVo reported a loss of 30 cents per share for the period ended Jan. 31, a wider loss than the 28-cent-per-share loss analysts were expecting. Revenue fell 19 percent to $55.8 million, as it sold steeply discounted set-top boxes during the holiday season.

With these substantial losses, analysts believe it is crucial that the maker of digital video recorder boxes wins its costly disputes with its competitors AT&T, EchoStar, Motorola (News - Alert) and Verizon for violating patents related to its DVR technology.

Winning a seven year battle with EchoStar would definitely help the company in trending back to profitability. A victory against EchoStar will pay roughly $200 million in damages through July 2009, and, most likely, damages through the present.

Discussing the damage caused by TiVo’s (News - Alert) long standing legal battles, Janney Capital Markets analyst Tony Wilbe said, "The increased cost will weigh on earnings, but we are optimistic that this cost could lessen if TiVo wins its legal battle with Dish, as this could provide an incentive for the remaining litigants to settle."

"Furthermore, TiVo would be entitled to recoup these fees if it prevails in its cases," he added.

When it comes to the perceivable future, Wilbe said the fact that TiVo is planning on investing in R&D suggests that the company is confident in its legal position and is preparing for an uptick in business. He also believes the company will benefit from signing up more customers through cable companies.

Charles West is a Web Editor for TMCnet. Prior to joining TMC (News - Alert) Charles worked with many gadget oriented sites that included running his own blog (TheTrendaholic.com) and Smartphone column for examiner.com. To read more of his articles, please visit his columnist page.

Edited by Charles West