Satellite television company DirecTV Inc. (DTV) on Tuesday reported an 8 percent increase in profit for the first quarter, reflecting strong subscriber growth in Latin America and higher revenues in the U.S. Earnings per share beat analysts' estimates by a penny.
However, the company added fewer subscribers in the U.S. than last year - a decline it attributed to greater focus on higher quality subscribers and stricter credit policies.
CEO Mike White said, "DirecTV delivered another strong quarter of financial and operating results highlighted by double-digit revenue, EPS and cash flow growth, fueled in part by another quarter of record-setting subscriber growth in Latin America."
In the latest quarter, DirecTV U.S. revenues increased 7 percent on strong growth in average monthly revenue per subscriber, or ARPU, and a larger subscriber base.
The segment's ARPU rose 3.6 percent, reflecting price increases on programming packages and leased boxes, higher advanced service fees and higher penetration of premium channels. These were partially offset by increased promotional offers to new and existing customers.
DirecTV U.S. added 81,000 new subscribers in the quarter as churn dropped 6 basis points to 1.44 percent. This compares to net additions of 184,000 in the year-ago period. The segment ended the latest quarter with 19.97 million subscribers, up 3 percent from last year.
DirecTV Latin America revenues for the quarter surged 33 percent, mainly due to strong subscriber growth partially offset by a 1.8 percent decline in ARPU. Net subscriber additions increased 39 percent to an all-time record of 593,000.
DirecTV's net income for the first quarter increased to $731 million or $1.07 per share from $674 million or $0.85 per share in the year-ago period.
On average, twenty two analysts polled by Thomson Reuters expected the company to earn $1.06 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter grew 12 percent to $7.05 billion from $6.32 billion in the prior-year quarter. Analysts had a consensus estimate of $7.06 billion.
DTV closed Monday's trading at $47.90, down $0.32 on a volume of 4.96 million shares. In Tuesday's pre-market, the stock is down $0.56 or 1.18 percent to $47.34.
by RTT Staff Writer
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