DirecTV focuses on profit, not subs

Profit more than doubles, revenue up 14%, sub gains down

NEW YORK - Satellite TV giant DirecTV focused more on profit and other financial growth than on subscriber gains in the latest quarter.

The company on Thursday reported 100,000 U.S. subscriber net additions for the first quarter, down sharply from the 460,000 recorded in the year-ago period. But its Latin American unit signed up 221,000 users compared with 148,000 in the year-ago quarter.

And DirecTV's profit and revenue rose sharply for the quarter as it didn't let a TV advertising battle with Dish Network drag it into chasing lower-quality customers that cost money to sign up, but then tend to leave the service soon after or can't pay their bills.

President and CEO Mike White touting "record-setting financial results that point to the tremendous operating and financial strengths of our businesses," and investors seemed to cheer the focus on financials by bidding up the stock more than 4% before stock markets turned negative amid fears over Greece's debt.

DirecTV's quarterly profit of $558 million more than doubled from $201 million in the year-ago period as revenue rose 14% to $5.61 billion. Average revenue per user also rose.

The company cited "last year's transition of free-to-air broadcasts from analog to digital, as well as a tougher competitive environment" as reasons for the weaker subscriber additions.

White on a conference call predicted solid second-half growth due to upcoming product launches and innovations, such as an expanded movie on-demand offer, and more targeted marketing initiatives that are planned. A possible housing rebound could also boost trends, he said.

As of the end of March, DirecTV U.S. had 18.66 million subscribers, up from less than 18.1 million at the same stage last year. DirecTV Latin America stood at 4.8 million versus 4.0 million.
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