DirecTV's costs offset higher revenue in Q3
(AP) – DirecTV Group Inc., the nation's largest satellite TV operator, said Thursday that its revenue grew 10 percent in the third quarter as it added more new customers, but its results suffered from higher marketing costs used to attract them.
DirecTV, which is second only to Comcast Corp. in the pay-TV industry, said a marketing tie-up with AT&T Inc. that began in February mainly accounted for the increase in new U.S. subscribers.
In the latest quarter, DirecTV earned $366 million, or 37 cents per share, compared with $363 million, or 33 cents per share, in the same quarter a year ago. Growth in per-share results outpaced the increase in overall earnings because the company had fewer shares in the latest quarter.
Revenue rose to $5.47 billion from $4.98 billion. DirecTV's U.S. operations posted revenue of $4.7 billion, up 9 percent from last year.
Analysts expected DirecTV to report earnings of 39 cents per share on revenue of $5.42 billion, according to a Thomson Reuters survey.
DirecTV added 136,000 new U.S. subscribers in the third quarter, down from 156,000 added in the same quarter last year. DirecTV said cancellations increased in the quarter as competitors stepped up promotions. On the whole, cable TV operators have been losing basic subscribers for many quarters to satellite TV companies like DirecTV, as well as phone company rivals.
U.S. customers, on average, paid $85.32 per month for DirecTV's services, up 2 percent from last year, in part due to increases on plan prices and HD and DVR service fees.
DirecTV's Latin America units saw a 16 percent increase in revenue to $761 million. Customers on average paid $59.80 per month, up 1 percent from a year before.
DirecTV owns 74 percent of Sky Brazil, 41 percent of Sky Mexico and PanAmericana, which serves most of the rest of the nations in that region.
DirecTV, based in El Segundo, Calif., serves 18.4 million U.S. customers. Its shares rose 93 cents, or 3.5 percent, to $27.77 in morning trading.