For four quarters running, DVR pioneer TiVo
What analysts say:
-
Buy, sell, or waffle? Seventeen analysts slow-mo TiVo, and their opinions cover the entire spectrum: seven buys, four holds, and six sells.
-
Revenues. On average, they're looking for 5.6% sales growth to $58.2 million.
- Earnings. Meanwhile, the aforementioned $0.02 per-share loss is predicted.
What management says:
Whether TiVo has learned to make a profit, its skill at printing press releases -- even about the most mundane matters -- is still unmatched. Since last quarter's earnings report, the company has announced terms for renewing its data license agreement with Tribune
Stirring stuff, surely. But hardly the equal of the news that Interpublic
What management does:
Press releases aside, profits continue to elude TiVo. Rolling gross margins continued to deteriorate last quarter, and operating margins turned back downward. In addition, marketing costs soared 61% year over year, offset somewhat by a 25% decline in general and administrative spending.
10/05 |
1/06 |
4/06 |
7/06 |
10/06 |
1/07 |
|
---|---|---|---|---|---|---|
Gross |
30.4% |
37.8% |
36.5% |
35.2% |
34.5% |
33.3% |
Operating |
(24.2%) |
(20.2%) |
(23.2%) |
(20.7%) |
(16.6%) |
(20.2%) |
Net |
(25.4%) |
(18.9%) |
(21.5%) |
(22.1%) |
(19.4%) |
(18.5%) |
One Fool says:
So with margins still heading down, why are Wall Street analysts predicting TiVo will come near to breaking even this quarter?
For one thing, the analysts are just parroting what management has already said publicly. In last quarter's earnings release, CFO Steve Sordello advised that the firm was targeting "Adjusted EBITDA breakeven for the full-year Fiscal 2008," and hoped to break even on a GAAP basis in fiscal Q1 2008 (that's tomorrow.) Over the last couple of quarters, we've seen progress toward this goal reflected in the firm's spending trends. For example, marketing costs are up on average just 32% against sales growth of 30% -- not too large a disparity. Meanwhile, the firm has driven general and administrative costs down 21%.
On the downside, Sordello's promise to "invest aggressively in our product" doesn't jibe very well with the firm's record of increasing R&D spending by just 22% year over year in the second half of fiscal 2007. Allowing R&D spending to lag sales growth may help the firm meet its goal of earning a profit this year. Still, as I've mentioned in the past in relation to similar action at EMC
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Fool contributor Rich Smith does not own shares of any company named above.