NEW YORK (AP) -- TiVo's stock neared a 52-week high on Tuesday after the digital video recording company's fiscal first-quarter results topped Wall Street's expectations on strong subscriber growth.
THE SPARK: TiVo Inc.'s quarterly loss shrunk by nearly half, while revenue grew 22 percent. The Alviso, Calif., company is increasing subscriptions through pay-TV distributors such as DirecTV, RCN and Virgin Media. That subscriber base grew by 277,000 to 2.4 million in the February-April period, TiVo said late Monday.
THE BACKGROUND: TiVo has struggled to make money, posting annual losses in nearly all of the past 10 years. It has gotten a boost in the past couple years from patent settlements, however, and litigation continues. TiVo next month starts a trial versus a Motorola TV set-top business that is now owned by Arris Group Inc.
THE ANALYSIS: TiVo's first-quarter subscriber growth through pay-TV distributors was the biggest gain in more than seven years, said Jefferies analyst Brian Fitzgerald in a research note. He expects gains to continue, and lifted his price target on TiVo shares by $1, to $17.
A representative for TiVo did not immediately respond to an email seeking comment.
Still, the biggest force driving the stock is the money TiVo is due or could win from patent settlements, said Janney Capital Markets' Tony Wible. He said he would prefer that TiVo settle with Motorola rather than go to trial.
SHARE ACTION: Shares of TiVo rose 26 cents, or 2.1 percent, to close at $12.92. TiVo has traded from $7.75 to $13.49 in the past 12 months, up nearly 3 percent in 2013.
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