HD demand helps DirecTV post 10% profit in Q1

Wed, 05/07/2008 - 8:40am
Mike Robuck

DirecTV said its first-quarter earnings increased by 10 percent, thanks in part to subscribers spending more on high-definition (HD) and digital video recorder (DVR) services.

DirecTV’s net income increased to $371 million, or 32 cents per share, compared with $336 million, or 27 cents per share, in the same quarter a year ago. The El Segundo, Calif.-based company’s revenue rose 17 percent – to $4.59 billion from $3.91 billion.

DirecTV said it added 275,000 net subscribers in the U.S., while increasing its subscriber base by 5.2 percent. DirecTV now has 17.1 million subscribers. DirecTV said the increased number of subscribers was helped by the company’s churn rate of 1.36 percent, which was its lowest churn rate in 10 years.

DirecTV’s average monthly revenue per subscriber (ARPU) increased by 8.6 percent from a year ago, to $79.70, which DirecTV President and CEO Chase Carey said was driven by the increased demand for HD services and DVR equipment.

The satellite operator added 200,000 net subscribers in Latin America to increase its subscriber base by 24 percent, to 3.5 million.

DirecTV also announced today that Liberty Media Corp. has agreed to restrict its voting interest to 48 percent in return for DirecTV’s announcement to increase its share repurchase program to $3 billion. DirecTV said it would fund the $3 billion by incurring up to $2.4 billion in new debt.

John Malone’s Liberty Media acquired a 41 percent stake in DirecTV in February (story here) and then increased its stake to 48 percent last month (story here).

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