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DirecTV turns in better-than-expected quarter

Wed, 02/07/2007 - 8:01am
Brian Santo, CED

DirecTV Group added 275,000 customers during the fourth quarter, compared with 200,000 a year earlier, to reach a total of 15.95 million subscribers.

In the past, DirecTV spent lavishly to acquire any new subscribers, but in the past year, it has been focusing on potential customers likely to take more expensive, higher-margin service packages. The company reported subscriber acquisition costs fell to $480.8 million from $637.9 million a year ago, while ARPU rose to $80.70 from $75.53 a year earlier.

Revenue rose to $4.18 billion from $3.6 billion in Q4 2005. Net profit was $356 million.

News Corp. still holds its controlling interest in DirecTV. It recently reached a deal to trade that interest to John Malone's Liberty Media. The deal is expected to close in the second half of 2007.

Discussing plans for the upcoming year, DirecTV CEO Chase Carey said, "First, we will launch several new innovative programming services over the coming months such as NASCAR HotPass, the Championship Gaming Series, and DirecTV On Demand. But perhaps the most important initiative will be the launch of up to 100 national HD channels in the second half of this year following the successful launch of a new satellite."

Despite DirecTV's Q4 success, analysts expect that DirecTV and EchoStar will both experience heavier slogging in '07 (story from Reuters here).

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