UPDATE: DirecTV Swings To 4Q Profit On Further Customer Growth
February 23 2011 - 9:35AM
Dow Jones News
DirecTV Group Inc. (DTV) swung to a fourth-quarter profit as the
satellite-TV provider continues to take market share from its cable
rivals.
The El Segundo, Calif., company added 289,000 net new U.S.
customers, or more than double its growth from a year ago, while
its Latin America unit signed up 378,000 net new customers in the
period.
The growth stands in contrast to the cable providers, which
continued their slow bleed of video customers in the fourth
quarter. DirecTV last year began focusing on adding higher quality
customers willing to sign up for more premium services and less
likely to leave, a move that many expected would result in fewer
new subscribers. That doesn't appear to be the case, as the company
saw the largest increase in a decade.
"In the past, we've called them the industry's metronome and a
well-oiled machine," said Craig Moffett, an analyst at Sanford
Bernstein & Co. LLC. "We're running out of metaphors."
While consumers slashed their spending during the downturn,
DirecTV was relatively protected because television service was one
of the last expenses to be cut. The company's base of higher end
customers--attracted to exclusives such as its NFL package--wasn't
as hurt by the economic troubles.
DirecTV reported a profit of $618 million, or 74 cents a share,
compared with a year-earlier loss of $32 million, or 3 cents a
share. Excluding charges related to the merger, the prior-year
profit would have been 48 cents.
Revenue jumped 11% to $6.62 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 62 cents on $6.52 billion in revenue.
In the U.S., where the company has most of its customers, its
subscriber base stood at 19.2 million as of the end of the
period--3.6% bigger than a year earlier. Churn, or the rate of
subscriber cancellations, dropped to 1.4% in the latest quarter
from 1.5% a year earlier. Average revenue per subscriber rose
4.6%.
In contrast, the cable companies reported declines in the fourth
quarter, which followed unprecendented weakness in the previous two
quarters, which suggested consumers were "cutting the cord" and
cancelling their pay-TV service. The strength of DirecTV and telcos
AT&T Inc. (T) and Verizon Communications Inc. (VZ), however,
suggest customers are switching to alternative providers.
The Latin America business has proven increasingly important in
the last few quarters. It contributed $1.03 billion in revenue as
all of its major financial metrics topped Wall Street expectations,
Moffett said. The business is seen as the company's major growth
catalyst down the line.
DirecTV shares rose 6% to $46.90 in pre-market trading.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153;
roger.cheng@dowjones.com
-Nathan Becker and Matt Jarzemsky contributed to this report
DTE Energy (NYSE:DTV)
Historical Stock Chart
From Jun 2024 to Jul 2024
DTE Energy (NYSE:DTV)
Historical Stock Chart
From Jul 2023 to Jul 2024