DirecTV Q1 Profit Down 19% On Venezuela Charge, Revenues Miss View

(RTTNews) - Satellite television company DirecTV Inc. (DTV) on Tuesday reported a 19 percent decline in profit for the first quarter from last year, as a charge related to the devaluation of the Venezuelan currency and higher expenses more than offset an increase in revenues.

However, revenues for the quarter missed analysts' estimates. The company noted that it surpassed 38 million total subscribers in the latest quarter.

Revenues from DirecTV U.S for the first quarter increased 5 percent from last year to $6.09 billion, reflecting strong ARPU growth along with a larger subscriber base. ARPU increased 4.3 percent to $100.16, while average monthly churn rate was flat with the year-ago period at 1.45 percent.

Net subscriber additions in DirecTV U.S. declined to 12 thousand from 21 thousand in the prior-year period, primarily due to a higher number of subscriber disconnections associated with the larger subscriber base.

DirecTV U.S. ended the quarter with 20.27 million subscribers, compared with 20.11 million subscribers in the same period last year.

DirecTV Latin America owns about 93 percent of Sky Brasil, 41 percent of Sky Mexico and 100 percent of PanAmericana, which covers most of the remaining countries in the region. DirecTV Latin America revenues for the quarter edged down 0.4 percent from the year-ago period to $1.72 billion.

However, net additions of 361 thousand were lower than net additions of 583 thousand in the year-ago period due to a decline in gross subscriber additions and a higher average monthly churn rate.

Cumulative subscribers at DirecTV Latin America at the end of the quarter were 11.93 million, up from 10.91 million in the prior-year quarter.

DirecTV's net income for the first quarter declined to $561 million or $1.09 per share from $690 million or $1.20 per share in the prior-year period.

The latest quarter's results include a charge of $281 million after tax, while the prior-year period's results include a charge of $136 million after tax, resulting from the revaluation of the net monetary assets of the company's subsidiary in Venezuela.

Adjusted net income for the quarter was $842 million or $1.63 per share, compared to $826 million or $1.43 per share in the same period last year. On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $1.50 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew 4 percent to $7.86 billion from $7.58 billion in the same period last year, principally due to strong ARPU growth at DirecTV U.S. Analysts' had a consensus revenue estimate of $7.91 billion.

Total operating costs and expenses rose 5 percent from the year-ago period to $6.63 billion, and includes a 6 percent increase in broadcasting programming and other expenses. Operating profit margin declined to 15.6 percent from 16.4 percent in the same period last year.

DTV closed Monday's trading at $79.84. In Tuesday's pre-market trades, the stock is adding $0.76 or 0.95 percent to $80.60.