DirecTV Reports Improved Fourth-Quarter Results
NEW YORK - DirecTV on Thursday reported higher fourth-quarter earnings and revenue as subscriber growth continued driven by its Latin American business, but slowed in the U.S. compared with the year-ago period.
The satellite TV giant posted a quarterly profit of $718 million, up 16 percent compared with the same quarter of 2010. Revenue rose nearly 13 percent to $7.46 billion.
DirecTV on Thursday also unveiled a new $6 billion stock buyback program, but management said U.S. subscriber growth will be more challenging in the future. The stock declined 2 percent to $45.38.
The company, led by chairman and CEO Mike White, said it added 715,000 net new subscribers in the fourth quarter. In the U.S., DirecTV added 125,000 net subs, compared with 289,000 in the year-ago period. In Latin America, its subscriber gain accelerated to 590,000 from 378,000 in the year-ago period.
The company ended 2011 with 19.89 million subscribers in the U.S., up from 19.22 million as of the end of 2010, and 7.87 million in Latin America, compared with 5.81 million at the end of 2010.
"Our fourth quarter results capped off another strong year of industry leading growth as we further extended our position as the world's largest provider of pay television services with nearly 32 million subscribers in the U.S. and Latin America," said White. "Strong consumer demand for DirecTV and Sky's premium brands drove full year gross additions in both our U.S. and Latin American businesses to all-time highs fueling the largest annual net gain in DirecTV's history of nearly 3.7 million subscribers, including Sky Mexico."
On a conference call with analysts, White said that subscriber growth will be more difficult in the U.S. going forward as "macroeconomic weakness continues to pressure the U.S. consumer" even though the economy has improved somewhat. He also cited continued intense competition in the pay TV field, calling it a "highly and intensely competitive industry," and more technological choices in and out of the home that provide consumers with alternative ways to get content.
With the higher cost of programming becoming a bigger challenge, DirecTV recently hiked its prices. But White said the company would also look to offer packages for the "more typical cost conscious consumers" with a new entertainment package.
While he still believes in the benefits of growing subscribers, DirecTV would be "a bit more disciplined" in the future, White said.
Meanwhile, DirecTV Latin America's "best days are yet to come," he suggested.
White on Thursday also signaled that the satellite TV giant's TV service would in the near future integrate social media more actively, but he didn't provide any details.