Hooray! For the second quarter in a row, TiVo (NASDAQ:TIVO) comes through with an unexpected profit.

Boo! The company is also hosing down its current quarter's outlook, and in a troubling development, it actually lost more company-owned subscribers than it gained during the period.

Tuning in to a TiVo earnings report is a lot like pressing the "thumbs up" and "thumbs down" button on a TiVo remote at the same time. TiVo does so many cool things, yet at the end of the day, it still can't grow its cheering section where it matters most: on its subscriber rolls. It's a speedster, but it's running in place.

Pause and rewind
The second quarter found service and technology revenue dipping by 5% to $53.5 million, shy of the $55.3 million mark that analysts had set. Its $0.03-per-share profit stunned Wall Street, which had expected red ink. The company did benefit from an inventory reserve it was able to tap, but it would have been squarely profitable anyway.

Missing on top and exceeding on the bottom can be partly traced to the company's attention to cutting promotional costs. Keeping its marketing in check, TiVo lowered its subscriber acquisition costs to a rock-bottom $135 per gross addition. That's good, but there's a price to pay for skimping. It may have greeted 36,000 new TiVo-owned subscribers, but 78,000 more departed. TiVo can't seem to grow beyond the 1.7 million TiVo-owning subscriber mark. People may be passionate about TiVo in theory -- check out Tropic Thunder to see what I mean -- but not in application.

TiVo is hemorrhaging even more members through third-party channels, but that's expected, since DirecTV (NYSE:DTV) has been switching over its new customers from TiVo to its own digital video recorder box.

Third-party weakness isn't a dealbreaker, because non-TiVo-owning subscribers contribute little into the company's coffers, though the high-margin technology licensing royalties from companies like Cox, DirecTV and Comcast (NASDAQ:CMCSA) are always welcome.

TiVo's challenge is to grow its TiVo-owned base before gravity owns TiVo.

Live TV going forward
The near term won't be pretty. The company sees a loss of $7 million to $9 million in the current quarter, roughly twice the deficit that TiVo watchers have been projecting. Guiding investors to no more than $51 million in service and technology revenue -- a sequential dip -- is merely bracing them for another rough quarter on the member-acquisition front.

This is the story of TiVo's life, unfortunately. Shares were bid up nearly 6% higher yesterday, in anticipation of a blowout quarter. Those gains came mostly undone in after-hours trading last night, on the heels of the actual report. This morning? Up again, after several analysts reiterated their buy ratings on the stock. Up. Down. Up. Make up your mind, Mr. Market!

TiVo is a lot like the Fonz: cool on the outside, but a dweebish Henry Winkler on the inside. But man, when it’s cool, it’s cool -- it knows how to start a jukebox with a tap from its fist.

Did you know the company is teaming up with Best Buy (NYSE:BBY) in a few test markets to create TiVo-branded home theater environments? It can then bundle HD TiVo boxes with high-def television set purchases. Did you know that you can use TiVo to play music for RealNetworks' (NASDAQ:RNWK) Rhapsody subscribers, or play Amazon.com (NASDAQ:AMZN) video purchases? Did you know that it's in the enforcement phase of its successful litigation against Dish Network (NASDAQ:DISH), which translates loosely into sending the Fonz over to make sure it gets paid?

Yes, TiVo is cool like that. Now shareholders like you and me better hope that it doesn't follow Fonzie in jumping the shark.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.