By Chelsea Stevenson
DirecTV Group Inc.'s (DTV) second-quarter earnings edged up as
the satellite television provider added a record number of net
subscribers in its Latin America business, which saw double-digit
revenue growth.
Latin America has become DirecTV's main source of growth as its
U.S. markets attract fewer new customers. The company this year
said it set a new plan that aims to double its Latin America
subscribers to more than 16 million and annual revenue to more than
$10 billion over the next five years. The company said business is
driven by greater middle market demand in Brazil, Argentina,
Colombia and Venezuela.
Net subscriber losses in DirecTV's larger U.S. business totaled
52,000, from the 26,000 subscribers added a year earlier. Total
subscriber base stood at 19.9 million at the end of the quarter, up
slightly from 19.4 million a year ago.
In Latin America, however, the company added a record 645,000
net subscribers in the latest quarter, up from 472,000 subscribers
tacked on a year earlier. The company had a total of 9.1 million
subscribers in the region by the end of the quarter, a 36% jump
from the year earlier.
DirecTV reported a profit of $711 million, or $1.09 a share,
compared with year-earlier profit of $701 million, or 91 cents a
share. The latest quarter included a $43 million pre-tax non-cash
loss from the revaluation of the U.S. dollar denominated
liabilities in Brazil.
Revenue increased 9.5% to $7.22 billion, driven by a roughly 20%
revenue growth in Latin America. Analysts were looking for earnings
of $1.14 a share on $7.21 billion in revenue, according to a poll
conducted by Thomson Reuters.
Operating margin widened to 19.5% from 18.6%.
Shares closed Wednesday at $50.10 and were inactive premarket.
The stock is up 17% so far this year.
Write to Chelsea Stevenson at chelsea.stevenson@dowjones.com
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