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TiVo shares get a boost from surprise 3Q profit

NEW YORK (AP) -- Shares of TiVo Inc. rose Thursday after the company posted a surprise third-quarter profit and analysts cheered the growth of its subscriber base.

For the quarter ended Oct. 31, Tivo earned $59 million, or 44 cents per share. Revenue rose 27 percent to $82 million.

Analysts polled by FactSet expected a loss of 5 cents per share on total revenue of $72.3 million.

The digital video recording company has struggled to make money, posting annual losses in eight of the past 10 years. It got a boost during this most recent quarter from more subscribers and a patent-dispute settlement.

TiVo, based in Alviso, Calif., has been aggressively pursuing patent disputes, and it reached a $250 million settlement with Verizon during the quarter. Meanwhile, its subscription base increased 44 percent to almost 3 million subscribers in the period.

In releasing its quarterly results, the company also projected a fourth-quarter loss of between $15 million and $17 million, steeper than the $14.4 million loss that analysts expected.

Despite the weak guidance, analysts were upbeat about TiVo's prospects.

Caris & Co.'s David Miller backed his “Buy” rating and $16 price target for the company calling its subscriber growth “truly outstanding.” He attributed the larger-than-expected fourth-quarter loss prediction to slightly higher-than-expected spending on legal expenses.

Jefferies analyst Brian Fitzgerald also backed his “Buy” rating and $15 price target for the company's stock, saying that its core business is improving, while its patent litigation pursuits provide the potential for extra revenue.

Up 60 cents, or 5.4 percent, to $11.45 in heavy afternoon trading, after initially dropping to $10.54 and the peaking at $11.38. Over the past 52 weeks, the company's shares have traded between $7.75 and $12.37. The stock is up almost 30 percent this year.

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