DIRECTV Meets Zacks Estimates - Analyst Blog
May 08 2012 - 9:00AM
Zacks
DIRECTV (DTV), the
largest satellite TV operator of the U.S., reported first quarter
of 2012 financial results, mostly in line with the Zacks Consensus
Estimates. The solid result was primarily attributed to the
combined effect of net customer additions and increased average
revenue per user (ARPU) in the U.S. segment.
However, the company’s net
subscriber addition in the most lucrative U.S. region declined 56%
year over year. Yesterday, DIRECTV’s closest competitor
DISH Network Corp. (DISH) reported much better net
subscriber addition in the U.S.
Total revenue in the reported quarter came in at $7,046 million, up
12% year over year, and slightly ahead of the Zacks Consensus
Estimate of $7,037 million. Quarterly GAAP net income was $731
million or $1.07 per share compared with $674 million or 85 cents
per share in the year-ago quarter. Quarterly earnings per share of
$1.07 per share were exactly in line with the Zacks Consensus
Estimate. Quarterly operating profit before depreciation &
amortization (OPBDA) was $1,903 million, up 7.8% year over year.
Operating profit in the reported quarter stood at $1,308 million,
up 13.3% year over year.
During the first quarter of 2012, DIRECTV generated $1,763 million
of cash from operations compared with $1,309 million in the
prior-year quarter. Free cash flow (cash flow from operations less
capital expenditures) in the reported quarter was $1,010 million
compared with $696 million in the year-ago quarter. At the end of
the first quarter of 2012, DIRECTV had $4,526 million in cash &
cash equivalents and $17,461 million of outstanding debt on its
balance sheet compared with $873 million in cash & cash
equivalents and $13,464 million of outstanding debt at the end of
2011.
DIRECTV U.S. Segment
Revenue from this segment was $5,499 million, up 6.9% year over
year on the back of strong subscriber base and significant ARPU
growth. Quarterly ARPU was $91.99 versus $88.79 in the prior-year
quarter. Growth in ARPU was mainly fueled by price increases on
programming packages and leased boxes, higher advanced service fees
and higher penetration of premium channels. Quarterly operating
profit before depreciation & amortization upped 3.5% to $1,410
million. Quarterly operating profit climbed 12.7% to $1,038
million.
Average monthly subscriber churn rate in the reported quarter was
1.44% compared with 1.50% in the prior-year quarter. Quarterly net
subscriber addition was 81,000 compared with 184,000 in the
year-ago quarter. As of March 31, 2012, DIRECTV U.S. had 19.966
million subscribers, up 2.9% on a yearly basis.
DIRECTV Latin America Segment
Segment revenue was $1,485 million, up 33.3% year over year, on
account of record subscriber growth. Quarterly ARPU was $60.59
versus $61.69 in the prior-year quarter, primarily driven by
foreign currency fluctuation. Quarterly operating profit before
depreciation & amortization increased 21.9% to $468 million and
operating profit inched up 13.7% to $249 million.
Average monthly subscriber churn rate in the reported quarter was
1.80% compared with 1.87% in the prior-year quarter. Quarterly net
subscriber addition was 593,000 compared with 427,000 in the
year-ago quarter. As of March 31, 2012, DIRECTV Latin America had
approximately 8.464 million subscribers, up 35.8% year over
year.
Recommendation
We maintain our long-term Neutral recommendation for DIRECTV.
Currently, DIRECTV has a Zacks#3 Rank, implying a short-term Hold
rating on the stock.
DISH NETWORK CP (DISH): Free Stock Analysis Report
DIRECTV (DTV): Free Stock Analysis Report
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