Latin American Growth Drives Higher DirecTV ProfitTuesday, May 8, 2012
DirecTV Inc.’s first quarter profit rose 8.5 percent, as better-than-expected subscriber growth in Latin America more than offset lower-than-expected growth in the United States.
The El Segundo satellite TV service provider on Tuesday reported net income of $731 million ($1.07 a share), compared with $674 million (85 cents) in the same period a year earlier. Revenue rose 12 percent to $7.05 billion.
Analyst surveyed by Thomson Reuters on average expected net income of $1.06 a share on revenue of $7.06 billion.
The nation’s largest satellite TV broadcaster added 81,000 subscribers in the United States, and 593,000 subscribers in Latin America. It ended the quarter with 20 million subscribers in the United States and 8.5 million subscribers in Latin America. Analysts surveyed by StreetAccount expected U.S. growth of 92,000 subscribers and 543,000 in Latin America.
DirecTV spent more money in Latin America to bring in those new customers as the company invested in satellites, equipment and better customer service. In the United States, the company said it concentrated on signing up “higher quality subscribers” and employed stricter credit policies with new customers. In addition, revenue per subscriber rose 3.6 percent to $91.99 as the company raised programming packages rates and equipment leases.
“Our industry leading revenue and earnings growth continues to be driven by the strength of our premier brands, popularity of our differentiated product and service offerings, and an enhanced focus on achieving operational excellence through effective cost management,” said Chief Executive Mike White in a statement.
Shares were down 93 cents, or nearly 2 percent, to $46.97 in late morning trading on the Nasdaq.