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TiVo Inc. surprised investors with a third-quarter profit, but its shares sank in after-hours trading Wednesday as it forecast a larger-than-expected fourth-quarter loss.
The digital video recording company has struggled to make money, posting annual losses in eight of the past 10 years. TiVo benefited during this most recent quarter from more subscribers and a patent dispute settlement.
TiVo has been aggressively pursuing patent disputes, and it reached a $250 million settlement with Verizon during the quarter. It also said that its subscription base increased 44 percent to almost 3 million subscribers in the period.
Tivo earned $59 million, or 44 cents per share, for the quarter that ended Oct. 31. That compares with a net loss of $24.5 million, or 21 cents per share, in its third quarter last year. Revenue increased 27 percent to $82 million.
Analysts expected a loss of 5 cents per share on total revenue of $72.3 million, according to FactSet.
TiVo expects to lose between $15 million and $17 million in the fourth quarter, beyond the $14.4 million loss that analysts forecast.
Shares of the Alviso, Calif.-based company fell 28 cents, or 2.6 percent, to $10.57 in after-hours trading. The stock rose 64 cents in regular trading to close at $10.85.