DirecTV's earnings up 21% on subscriber gains
NEW YORK (AP) – DirecTV Group, the nation's largest satellite TV operator, on Thursday said its profit rose 21 percent in the first quarter as it continued to grow faster than rival Dish Network.
El Segundo, Calif.-based DirecTV added a net 611,000 subscribers in the January-to-March period, the second-best result in a decade after the fourth quarter's 667,000 additions.
As has been the trend in the last two years, DirecTV's Latin American operations accounted for most of the new subscribers. But the company also added 184,000 U.S. subscribers, up from 100,000 a year ago. Dish Network on Monday reported adding 58,000 subscribers in the same period.
DirecTV shares hit a new all-time high of $49.64 on Thursday, but retreated during a conference call that executives held with investors and analysts. In afternoon trading, the shares were down 20 cents, or 0.4 percent, at $48.30.
CEO Mike White said on the call that he'd seen an increase in competing offers in the U.S., which caused an uptick in "churn," or the rate of customers leaving. However, he doesn't think this puts the company's full-year forecast at risk.
In Latin America, the strong performance in the first quarter prompted the company to raise its revenue growth forecast for the full year to 30 percent from 20 percent. The company is benefiting from the rise of the middle class on the continent, particularly in Brazil, but its Latin American operations make up only 22 percent of overall revenue.
DirecTV ended the quarter with 19.4 million U.S. subscribers, keeping its position as the second-largest provider of pay-TV in the U.S., after cable company Comcast Corp.
DirecTV said its net income rose to $674 million, or 85 cents per share, from $558 million, or 59 cents per share, a year ago.
Analysts polled by FactSet expected earnings of 71 cents per share, on average, though they were likely excluding a $25 million pretax gain from the sale of a stake in Game Show Network.
Revenue grew 13 percent to $6.32 billion from $5.61 billion, helped by both subscriber growth and higher monthly fees. Analysts expected $6.23 billion.