DirecTV Q2 Profit Up 22%, Results Beat View

(RTTNews) - Satellite television company DirecTV Inc. (DTV) on Thursday reported a 22 percent increase in profit for the second quarter from last year on higher revenues in the U.S. and strong subscriber growth in Latin America due to the FIFA World Cup.

Both revenue and adjusted earnings per share for the quarter beat analysts' estimates. The company noted that it surpassed 39 million total subscribers in the latest quarter.

Mike White, President and CEO of DirecTV said, "DIRECTV Latin America's second quarter results highlight the tremendous success of our unparalleled FIFA World Cup coverage, while DIRECTV U.S. continues to successfully execute on our overarching goal to balance top line sales with bottom line profitability."

Telecom giant AT&T Inc. (T) has offered to acquire satellite-TV company DirecTV (DTV) for $48.5 billion in a cash and stock deal.

Revenues from DirecTV U.S for the second quarter increased 6 percent from last year to $6.27 billion, reflecting strong ARPU growth along with a larger subscriber base. ARPU increased 4.6 percent to $103.26, while average monthly churn rate increased to 1.55 percent from 1.53 percent in the year-ago period.

Net subscriber losses in DirecTV U.S. was about 34 thousand, compared to net losses of 84 thousand in the prior-year period. The improved result was primarily due to an 8 percent increase in gross additions to about 908 thousand, partially offset by a slightly higher average monthly churn rate.

DirecTV U.S. ended the quarter with 20.23 million subscribers, compared with 20.02 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 grew 6 percent from the year-ago period to $1.79 billion.

Net subscriber additions in the quarter were 543 thousand, compared to net additions of 165 thousand in the same period last year. The increase was primarily driven by demand related to the FIFA World Cup.

Cumulative subscribers at DirecTV Latin America at the end of the quarter were 12.47 million, up from 11.08 million in the prior-year quarter.

DirecTV's net income for the second quarter was $806 million or $1.59 per share, up from $660 million or $1.18 per share in the prior-year period.

The company noted that the "Other, net" in the latest quarter was impacted by a $44 million improvement in foreign currency translation at Sky Brasil and a $59 million non-cash pre-tax charge in the year-ago quarter due to the de-consolidation of DSN Northwest.

Adjusted net income for the quarter was $809 million or $1.59 per share, compared to $660 million or $1.18 per share in the same period last year. On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $1.53 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew 5 percent to $8.11 billion from $7.70 billion in the same period last year, principally due to ARPU growth of 4.6 percent at DirecTV U.S. as well as strong subscriber growth at Directv Latin America over the last twelve months. Analysts' consensus revenue estimate for the quarter was $8.02 billion.

Total operating costs and expenses rose 5 percent from the year-ago period to $6.69 billion, and includes a 7 percent increase in broadcasting programming and other expenses. Operating profit margin edged up to 17.6 percent from 17.5 percent in the same period last year.

DTV is trading at $85.97, down $0.28 or 0.32 percent on a volume of 165,102 shares.