DTV DTE Energy Company

The largest U.S satellite TV operator, DIRECTV (DTV) posted robust first-quarter 2013 financial results. Both the top line and the bottom line surpassed the Zacks Consensus Estimate. DIRECTV currently has a Zacks Rank #3 (Hold).  

Total revenue in the reported quarter came in at $7,580 million, up 7.6% year over year, and well ahead of the Zacks Consensus Estimate of $7,548 million. Such impressive growth in revenues was mainly attributed to huge subscriber growth in Latin American region. Quarterly GAAP net income was $690 million or $1.20 per share compared with $731 million or $1.07 per share in the year-ago quarter. However, adjusted earnings per share (excluding the Venezuelan currency devaluation charge) of $1.43 easily beat the Zacks Consensus Estimate of $1.38. Quarterly adjusted operating profit before depreciation & amortization (OPBDA) was $2,086 million, up 9.6% year over year. Adjusted operating profit in the reported quarter stood at $1,408 million, up 7.7% year over year.

During the first quarter of 2013, DIRECTV generated $1,536 million of cash from operations compared with $1,763 million in the prior-year quarter. Free cash flow (cash flow from operations less capital expenditures) was $788 million in the reported quarter compared with $983 million in the year-ago quarter. At the end of the first quarter of 2013, DIRECTV had $1,679 million in cash & cash equivalents and $18,365 million of outstanding debt on its balance sheet compared with $1,902 million in cash & cash equivalents and $17,162 million of outstanding debt at the end of 2012.

DIRECTV U.S. Segment

Revenues from this segment were $5,790 million, up 5.3% year over year on the back of strong subscriber base and significant ARPU growth. Quarterly ARPU was $96.05 compared with $91.99 in the year-ago quarter. Quarterly operating profit before depreciation & amortization upped 7.9% to $1,521 million primarily buoyed by reduced subscriber acquisition cost.  Quarterly operating profit climbed 7.4% to $1,115 million.

Average monthly subscriber churn rate in the reported quarter was 1.45% compared with 1.44% in the prior-year quarter. Quarterly net subscriber growth was 21,000 compared with 81,000 subscriber additions in the year-ago quarter. As of Mar 31, 2013, DIRECTV U.S. had 20.105 million subscribers, up 0.7% on an annualized basis. Although the rate of growth of net subscriber addition decreased, the company is still adding net subscribers while major pay-TV operators like Comcast Corp. (CMCSA) and Time Warner Cable Inc. (TWC) are continuously losing subscribers. The company’s closest competitor DISH Network Corp. (DISH) will report on May 9, 2013.

DIRECTV Latin America Segment

Segment revenues were $1,728 million, up 16.4% year over year,on account of massive subscriber growth. Quarterly ARPU was $54.23 compared with $60.59 in the prior-year quarter, primarily driven by foreign currency fluctuation. Quarterly operating profit before depreciation & amortization increased 16.7% to $546 million and operating profit increased 13.7% to $283 million.

Average monthly subscriber churn rate in the reported quarter was 1.88% compared with 1.80% in the prior-year quarter. Quarterly net subscriber addition was 583,000 compared with 593,000 in the year-ago quarter. As of Mar 31, 2013, DIRECTV Latin America had approximately 10.912 million subscribers, up 28.9% year over year.

 
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