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TiVo profits from EchoStar litigation

The company's third-quarter earnings are boosted into positive territory after receiving $105 million in patent trial award.

This post was updated at 3 p.m. PST with information from the earnings call.

EchoStar's loss was TiVo's gain during the third quarter of 2008.


Alviso, Calif.-based TiVo on Tuesday announced it recorded profits of $100.6 million for the quarter, or 98 cents per share, compared with a loss of $8 million for the same quarter a year ago.

The staggering change in fortunes for the DVR maker was due to the patent litigation judgment it won against EchoStar. EchoStar paid TiVo $105 million in damages during the quarter--if it hadn't, TiVo would have reported a net loss of $900,000.

The company's core business continues to fall off.

TiVo signed up 44,000 new subscribers during the quarter, but that's 25 percent fewer than the 69,000 signed up during the third quarter last year. Overall, the company's subscriptions total 3.6 million, compared with the 3.7 million counted at the end of the second quarter of this year.

Money made this quarter from its subscription service, technology, and hardware decreased in each category. Total revenue came in at $64.5 million, down from $75.5 million a year ago.

And the company expects to feel the impact of the financial crisis.

"Though we are pleased with our results this quarter, we recognize that no business is immune to the challenges of the current economic climate, which we expect will adversely affect consumer electronics companies, including TiVo, during the holiday season," said TiVo CEO Tom Rogers on a conference call with investors Tuesday.

The company also addressed the impact of Circuit City's bankruptcy. TiVo won't be directly impacted by the bankruptcy filing, according to new CFO Anna Brunell.

"But the bad news is we'll see less contribution this holiday season from our second-largest retail partner," she said. "That makes what will be a difficult selling season even more difficult."

The company plans to look at more ways to decrease costs, including laying off 7 percent of its workforce, as announced last week.

Looking ahead, TiVo said it's expecting fourth-quarter revenue between $47 million and $49 million, and a net loss of between $10 million and $12 million.

TiVo shares rose more than 1.5 percent to reach $4.50 in after-hours trading Tuesday.