DirecTV Adds Subscribers, Beats Earnings Forecast

(RTTNews) - DirecTV, Inc. (DTV), which is being acquired by AT&T, Inc. (T), reported Thursday a profit for the fourth quarter that decreased four percent from last year, despite revenue growth and a big jump in new subscribers.

Lower operating margins hurt the bottom line, but both earnings per share and quarterly revenues topped analysts' expectations.

DirecTV provides digital television entertainment to more than 39 million customers primarily in the U.S. and Latin America.

"Our fourth quarter results, although marked by challenging macroeconomic conditions in Latin America and a conscious decision to reinvest in our U.S. business, capped off another strong year of operations for DIRECTV. In Latin America, despite the macroeconomic headwinds, our DIRECTV and Sky brands attracted over 1.4 million net new customers - surpassing the 19 million cumulative subscriber mark by year-end," President and CEO Mike White said in a statement.

El Segundo, California-based DirecTV, the largest U.S. satellite TV company, reported net income of $778 million for the fourth quarter, lower than $810 million in the prior-year quarter, while earnings per share remained flat with last year at $1.53 per share.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $1.40 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter increased 4 percent to $8.92 billion from $8.59 billion in the same quarter last year, and topped nineteen Wall Street analysts' consensus estimate of $8.91 billion by a whisker.

DirecTV U.S. revenues grew 5 percent to $7.14 billion from a year ago, due to strong Average Monthly Revenue per subscriber, or ARPU, growth of 5.0 percent to $117.30, and larger subscriber base.

DirecTV U.S. ended the quarter with 20.35 million subscribers after net subscriber additions of 149,000 during the quarter, compared to 93,000 subscribers added in the year-ago quarter.

Revenues for DirecTV Latin America (DTVLA), which owns about 93 percent of Sky Brasil, 41 percent of Sky Mexico and 100 percent of PanAmericana, was $1.73 billion, down from the prior-year quarter's $1.77 billion.

DirecTV Latin America ended the quarter with 12.47 million subscribers after net subscriber additions of 118,000 during the quarter, compared to 231,000 subscribers added in the prior-year quarter.

DirecTV's operating profit margin for the quarter contracted 140 basis points to 14.1 percent from last year's 15.5 percent, due to lower margins at DIRECTV Latin America (DTVLA), as well as a slight decline at DIRECTV U.S

Total operating costs and expenses for the quarter increased to $7.67 billion from $7.26 billion a year ago.

"2015 will bring additional challenges to our businesses, but given our solid continued operating momentum and the pending merger with AT&T, I am confident that we will continue to drive value for our shareholders for the foreseeable future," White added.

DTV closed Wednesday's regular trading session at $87.34, up $0.04 on a volume of 1.90 million shares. In the past 52-week period, the stock has been trading in a range of $72.28 to $89.46.