New subs boost DirecTV's quarterly results

CEO: Company 'immune' to troubled economy so far

DirecTV Group continued to sign up subscribers at a solid pace during the fourth quarter of 2008, prompting an analyst to say the satellite TV firm has been "impervious" to the deepest U.S. recession in decades.

"We've been immune to a lot of the economic pressures," though DirecTV has seen weakened advertising-revenue momentum, CEO Chase Carey said Tuesday during a conference call, adding that his firm will not be able to avoid an economic hit completely.

"I expect the economy to put pressure on us," Carey told analysts.

El Segundo, Calif.-based DirecTV reported a fourth-quarter profit of $332 million, down 4.6% from the year-ago period on higher marketing and installation costs. Revenue rose 9% to $5.31 billion. Both figures fell slightly short of analysts' expectations, but subscriber growth exceeded estimates.

The company added 301,000 net new U.S. users during the quarter, compared with 275,000 during the year-ago period, making for its biggest quarterly gain in more than three years. Collins Stewart analyst Thomas Eagan had expected only 215,000 adds, and the average Wall Street estimate was 233,000. As of Dec. 31, DirecTV had 17.6 million customers.

Carey said the quarter capped "the best year ever for DirecTV in both the United States and Latin America."

The results prompted Sanford C. Bernstein analyst Craig Moffett to say DirecTV has managed to stay "22 thousand miles above the recession." In a report, he said: "One could make a case that DirecTV has, at least so far, been as little impacted by the recession as any company in America. Others may have gained (Wal-Mart comes to mind), a great many have lost ... but precious few have remained essentially untouched."

He argued that DirecTV's results reinforce the view that the pay TV sector will "remain relatively unscathed" during the downturn.

Carey predicted that DirecTV's U.S. business in 2009 will "look a lot" like it did in 2008, with net subscriber growth around the 861,000 seen this past year. That figure was only slightly below the gain of 878,000 recorded in 2007.

Eagan said DirecTV is taking market share from cable as Time Warner Cable lost 119,000 basic subscribers during the holiday quarter, and he expects Comcast Corp. to report a loss of 130,000-140,000.

DirecTV shares closed down 1.2% on Tuesday at $22.30.