DISH Network Corp (DISH)

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TiVo makes profit but sees loss
Wed Aug 27, 2008 7:28pm EDT

http://www.reuters.com/article/marketsNews/idINN2749153420080827?rpc=44&sp=true

LOS ANGELES, Aug 27 (Reuters) - Digital video recorder maker TiVo Inc (TIVO) forecast a wider-than-expected third-quarter loss, citing legal costs, and shares fell more than 3 percent, erasing most of the day's gains.

The company, which helped revolutionize the way many people watch TV, said on Wednesday net income for the quarter ended July 31 was $2.9 million, or 3 cents per share, compared with a loss of $17.7 million, or 18 cents per share, in the second quarter a year earlier.

Adjusted earnings of 2 cents a share beat analysts' average estimate of a loss of 2 cents a share, according to Reuters Estimates.

Revenues rose to $65.2 million from $62.7 million.

For the third quarter, TiVo anticipates service and technology revenues in the range of $49 million to $51 million, as well as a net loss in the range of $7 million to $9 million. Wall Street on average expected a loss of $4.2 million.

Tom Rogers, president and CEO of TiVo, said the anticipated loss was due to seasonal increases in expenditure for inventory and marketing costs, in advance of the holiday shopping season.

Spokesman Derek Newman said additional legal costs in TiVo's patent suit against satellite TV operator EchoStar (DISH) also would drive the loss.

Mark Harding, an analyst with Maxim Group, said TiVo's anticipated loss in the third quarter is not as bad as the company's share price loss on Wednesday reflected.

"It's not good but I think at this point management is being somewhat conservative on the guidance," Harding said. "They have been conservative in the past."

He said the upcoming court battle between TiVo and Echostar is more significant than the anticipated third-quarter loss, because the court case could "push Echostar into a licensing agreement with TiVo".

The company also announced on Wednesday a partnership with Entertainment Weekly that will allow TiVo subscribers to automatically record the magazine's "What to Watch" TV recommendations.

Shares fell 27 cents, or 3.4 percent, to $7.69 in after-hours trading. The stock had gained 43 cents, or 5.7 percent, to close at $7.96 in regular Nasdaq trade. (Reporting by Alex Dobuzinskis, Gary Hill)

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