Customers purchasing high definition and DVR packages helped increase DirecTV’s fourth quarter revenues by 17 percent, although the satellite provider said high interest payments on its debt caused its earnings to be down by 2 percent.
El Segundo, Calif.-based DirecTV said in an earnings report today that revenues were driven by net subscriber growth both here and in Latin America. The company added 275,000 new subscribers in the United States during the quarter, and 474,000 net subscribers, for a total of 16. 8 million subscribers at the end of the quarter, which was a 6 percent increase over the 15.9 million subscribers during the same time frame in 2006.
DirecTV also benefited from higher average revenues per subscriber, which increased by 8.3 percent to $87.40, thanks in part to higher prices for HD services, DVRs and equipment fees.
While cable companies such as Comcast have seen their basic subscriber numbers diminish recently, DirecTV said its monthly churn rate in the U.S. fell during the fourth quarter to 1.42 percent, which DirecTV CEO and president Chase Carey said was the lowest in eight years.
"DirecTV's content and service leadership continue to drive superior results in a tougher marketplace that reflects increasing competition and a slowing economy. Advanced services, including the launch of the industry's best HD programming, played an increasingly important role in DirecTV U.S.'s top-line and bottom-line results," said Carey.
Carey said the lower churn rate was due to a 10 percent increase in the number of subscribers who bought HD and DVR services, as well as “tighter credit policies” by the company.
DirecTV earned $348 million in the quarter compared to $356 million a year ago. The company’s per share income increased to 30 cents from 29 cents because DirecTV had more outstanding shares in the fourth quarter.
For the year, DirecTV had net income of $1.45 billion, or $1.21 a share, compared to $1.42 billion, or $1.13 per share, in 2006. Full-year revenue increased to $17.2 billion compared to 2006’s $14.8 billion.
"We exit 2007 with tremendous operating and financial momentum,” Carey said. “We believe we are delivering on our goal to provide the best television experience, including the most extensive HD programming in America. With the launch of our next satellite in a couple of months, we will extend DirecTV's leadership by introducing even more local and national HD channels.”
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