DirecTV’s Q1 profit almost triples as revenue rises

Thu, 05/06/2010 - 8:25am
Deborah Yao, AP Business Writer

(AP) – DirecTV Inc., the nation's largest satellite TV provider, said Thursday that its net income nearly tripled after it added new video customers, principally at the expense of rival cable companies. Its shares rose more than 4 percent in morning trading.

The El Segundo, Calif., company added 100,000 net new U.S. customers in the quarter, down from last year's 460,000, which was inflated by long holdouts to subscription TV service finally signing up as the country switched to digital broadcasting from analog.

DirecTV, rival satellite TV company Dish Network Corp. and phone companies offering video service have been chipping away at cable's two-thirds market share of the subscription TV market.

On Thursday, Cablevision Systems Corp. reported a 900 subscriber gain in the first quarter from the prior quarter, but it was down 37,900 year-over-year. Comcast Corp. lost 82,000 video customers sequentially, while Time Warner Cable Inc. lost 42,000 compared with the prior quarter.

DirecTV earned $558 million, or 59 cents per share, in the quarter ended March 31, up from $201 million, or 20 cents per share, a year ago.

Revenue rose 14 percent to $5.6 billion from $4.9 billion a year ago.

The results beat analysts' forecast for earnings of 45 cents per share and revenue of $5.4 billion.

Free cash flow, a key metric of subscription TV companies because they tend to have massive debt burdens, more than doubled to $1 billion.

The average monthly revenue per U.S. subscriber came to $85.47, up 6.4 percent. That's due to price increases, higher high-definition TV and digital video recorder fees, higher advertising sales, and an extra week of revenue for its NFL Sunday Ticket package.

DirecTV's Latin American operations saw revenue rise by 30 percent to $779 million. It added 221,000 customers in the quarter, up from 148,000.

Shares of DirecTV rose by $1.56, or 4.4 percent, to $36.79 in morning trading.

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•  DirecTV's Q1 profit almost triples as revenue rises
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