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TiVo revenue jumps

The maker of digital video recorders reports a net loss and says an accounting error will force an earnings restatement for last year.

Digital video recorder company TiVo reported Thursday a sixfold increase in revenue that met raised estimates and a net loss for the second quarter.

The San Jose, Calif.-based company also announced the discovery of a balance sheet error, and will restate financial results for the quarter ending April 30, as well as for the year ending Jan. 31. TiVo said the restatement will not affect the company's current reported cash, revenue or operating loss.

TiVo reported a net loss of $3 million, or 6 cents per share, for the quarter ending July 31. In comparison, TiVo reported a net loss of $34.5 million, or 82 cents per share, for the same quarter a year ago.

Revenue totaled $23.9 million for the quarter, up from $4.1 million a year ago. TiVo raised its revenue guidance to between $23 million and $24 million earlier this month, citing the realization of revenue from a licensing agreement with Sony. TiVo has a licensing agreement with Toshiba and two other companies that it has not yet disclosed.

"The second quarter demonstrated the power of our licensing subscription businesses," said Mike Ramsay, TiVo's chairman and chief executive. "Our competitors shrank this quarter and we continued to grow."

TiVo added 42,000 net subscribers to its service, bringing the total to 464,000. The company said its subscriber base has doubled in the past twelve months. Subscriber loss, or churn, remained low, in the range of one percent per month. However, the company lowered its outlook for adding new subscribers for the year, from a range of 250,000 to 300,000 to 250,000 to 275,000.

The company raised its revenue estimate for the fiscal year from a range of $50 million to $60 million to $57 million to $62 million. TiVo is aiming to reach cash flow breakeven by the end of the fiscal year. The company claimed $27 million in cash, cash equivalents and short-term investments as of July 31.

Sony will release a new digital video recorder offering TiVo service in the U.S. market by the holiday season. DirecTV is also set to launch a new digital satellite recorder offering TiVo service this fall. The recorder is expected to cost $200.

The company's new audior, KPMG, discovered the balance sheet error. TiVo's previous auditor, Arthur Andersen, was removed from duties in May of this year.

TiVo shares gained 8 percent in after-hours trading to $4.51.