DirecTV Revenue Up 15 Percent to $5B

November 6, 2008

The DirecTV Group Inc. reported that third quarter revenues of $4.98 billion, up 15 percent from the same quarter last year. Operating jumped 16 percent to $658 million. Net income grew 14 percent to $363 million and earnings per share rose 22 percent to 33 cents.

The 156,000 net subscriber additions in the quarter were significantly lower than last year’s third-quarter total of 240,000, as the tough economic environment increased customer churn. But ARPU grew 6.1 percent to $83.59, mainly due to programming package price increases and higher HD and DVR service fees.

Still, the growth fell just short of some analysts’ forecasts, and DirecTV’s stock price fell about a dollar on the financial news Thursday morning to below $20. In early September, the stock traded above $27.

"In an increasingly challenging economic and competitive environment, we're continuing to see strong consumer demand for DirecTV's unique and differentiated content including its industry-leading HD, DVR and interactive services,” Chase Carey, DirecTV Group president and CEO, said in a statement.

In the United States, solid DirecTV subscriber growth, along with the increase in ARPU pushed revenues up 11 percent to $4.3 billion. Strong revenue and a 31 percent decline in capital expenditures (primarily lower set-top box costs and an increasing use of refurbished set-top boxes) led to an 85 percent hop in cash flow. Latin America revenues grew 49 percent to $658 million.

Partially offsetting the rise in operating profits was increased interest expenses, thanks to increased debt.














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