Blockbuster 4Q for DIRECTV - Analyst Blog
February 14 2013 - 10:19AM
Zacks
The largest U.S satellite TV operator DIRECTV
(DTV) has posted solid fourth-quarter 2012 results, with both the
top and the bottom line beating the Zacks Consensus Estimates. Its
performance was mainly attributable to record subscriber growth
across its Latin American markets.
In synergy with such strong results, DIRECTV authorized a fresh
share repurchase plan of $4 billion.
Total revenue in the reported quarter came in at $8,054 million,
up 7.9% year over year, and slightly ahead of the Zacks Consensus
Estimate of $8,022 million. Growth in revenue was mainly
attributable to huge subscriber growth in both Latin America and
U.S. region.
Quarterly GAAP net income was $942 million or $1.55 per share
compared with $718 million or $1.02 per share in the year-ago
quarter. Quarterly earnings per share of $1.55 topped the Zacks
Consensus Estimate of $1.15. Quarterly operating profit before
depreciation & amortization (OPBDA) was $1,924 million, up 8%
year over year. Moreover, operating profit in the reported quarter
stood at $1,298 million, up 6.9% year over year.
At the end of fiscal 2012, DIRECTV generated $5,634 million of
cash from operations compared with $5,185 million in the prior-year
quarter. Free cash flow (cash flow from operations less capital
expenditures) was $2,674 million in the quarter compared with
$2,261 million in the year-ago quarter.
At the end of the fourth quarter of 2012, DIRECTV had $1,902
million in cash & cash equivalents and $17,170 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 $6,320 million, up 4.8% year over
year on the back of strong subscriber base and significant ARPU
growth. Quarterly ARPU was $105.2 against $101.4 in the year-ago
quarter. Growth in ARPU was mainly fueled by price increases on
programming packages and leased boxes and higher advanced service
fees.
Quarterly operating profit before depreciation &
amortization increased 6.1% to $1,408 million primarily buoyed by
reduced subscriber acquisition cost. Quarterly operating profit
climbed 6% to $1,023 million.
Average monthly subscriber churn rate in the reported quarter
was 1.43% compared with 1.52% in the prior-year quarter. Quarterly
net subscriber growth was 103,000 compared with 125,000 subscriber
additions in the year-ago quarter. At the end of 2012, DIRECTV U.S.
had 20.08 million subscribers, up 1% on an annualized basis.
DIRECTV Latin America Segment
Segment revenue was $1,674 million, up 22% year over year, on
account of massive subscriber growth, which was, however, dampened
by reduced ARPU growth. Quarterly ARPU was $55.8 versus $60.4 in
the prior-year quarter, primarily driven by foreign currency
fluctuation. Quarterly operating profit before depreciation &
amortization increased 17.1% to $494 million and operating profit
rose 18.6% to $261 million.
Average monthly subscriber churn rate in the reported quarter
was 1.75% compared with 1.65% in the prior-year quarter. Quarterly
net subscriber addition was 658,000 compared with 590,000 in the
year-ago quarter. DIRECTV Latin America exited fiscal 2012 with
approximately 10.328 million subscribers, up 31% year over
year.
Currently, DIRECTV has a Zacks Rank #3 (Hold)
Other Stocks to Consider
Meanwhile, one can look at some other companies like
Comcast Corporation (CMCSA), Time Warner
Cable Inc. (TWC) and DISH Network Corp.
(DISH). While Comcast fell shy of the Zacks Consensus Estimate,
Time Warner surpassed the Zacks Consensus Estimate. DISH Network is
yet to release its fourth-quarter 2012 results on Feb 20.
Both Comcast and Dish Network are currently at Zacks Rank #3
(Hold), but Time Warner Cable has a Zacks Rank #5 (Strong
Sell).
COMCAST CORP A (CMCSA): Free Stock Analysis Report
DISH NETWORK CP (DISH): Free Stock Analysis Report
DIRECTV (DTV): Free Stock Analysis Report
TIME WARNER CAB (TWC): Free Stock Analysis Report
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