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Finding Value in Earnings Conference Calls, Part I: Prepping Questions


Could you guys please read me the first 20 pages of your earnings release? Thanks!


Conference calls used to be the bane of my existence, when I ran OPM (other people's money). The loathing didn't spring from a sense of "overwork"; the inflow of information during earnings season was welcomed. Indeed, for an information junkie it's impossible to have too many companies reporting at once.

It's listening to the companies actually talk about their reports which created the soul-crushing tedium. In the post Sarbanes-Oxley world, calls are all about the boiler-plate. Remember the Iowa Aptitude Tests we all took in grade school? The ones that came with the legally-required-to-be-verbatim "read along silently as I read the instructions [which will be agonizingly detailed... if you have questions when I am finished, please hand in your test and resume eating paste."]?

If you liked those you'll love conference calls, circa 2005.

But you gotta be on 'em, if only for the Q&A. Now that I've lowered the entertainment value bar for our excercise, let's run through some of the questions raised by the DTV report. These are the questions we hope to have answered (all or in part) on the call:

  • Churn higher than you expected and you're blaming it on your own "credit risk id" program? Can't you be expected to control the # of customers you kick off your own system?

  • And, from what I've at least heard, there are customers who are suddenly finding themselves booted off your system for reasons they can't seem to get explained. How are you controlling for "false positives" on these risky customers?

  • Generally, service has been compromised by staff-reductions, a botched tech upgrade and the curious policy of proactively cutting service. You guys are SURE there couldn't be anything else going on there, in terms of your higher than expected churn?

  • Said another way, how married are you folks to this #1 Ranking thing? I'm pretty sure it's gone in a couple of weeks.

  • Of course, I'll want to know about the timeframe for dumping Tivo (TIVO) in favor of the NDS Group (NNDS) box. This matters for Tivo, for obvious reasons but (I think) to a limited extent. For DTV, the questions are: "Why are you so hostile to TiVO customers, who are your lowest churning body?" "Isn't it going to be expensive to give away boxes for free vs. selling them through Tivo?

  • Not to put too fine a point on it, but how is the switch to NDS a good deal for anyone other than the Murdochs (who control NDS) and customers, who generally like "free" things? Aren't you guys pretty much hosing DTV shareholders on an ongoing basis?

The muzak is on and the call is about to start. My real-time diary from that call will follow.

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Position in TIVO

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