MAY 8, 2009 DirecTV Net Falls; Subscriptions Rise
By ROGER CHENG Wall Street Journal http://online.wsj.com/article/SB124172714805297457.html DirecTV Group Inc. posted a 46% decline in first-quarter earnings even as the satellite-TV provider added 460,000 net new U.S. subscriptions. The new subscriptions represented a 67% gain from the year-earlier quarter and marked a four-year high. The company was helped by the upcoming digital-TV transition on June 12, as well as its resale partnership with AT&T Inc. U.S. subscribership at the end of March was 18.1 million, up 5.7% from a year earlier. "Perhaps the only quibble will be whether they achieved the growth via undue discounting," said Craig Moffett, an analyst at Sanford C. Bernstein & Co. LLC. DirecTV acknowledged the issue, and vowed to better balance its revenue growth with its profitability. "In hindsight, we overestimated the impact of the economy a bit" and were more aggressive than necessary, Chief Executive Chase Carey told analysts during a conference call. DirecTV reported profit of $201 million, or 20 cents a share, down from $371 million, or 32 cents, a year earlier. Revenue increased 6.8% to $4.9 billion. Analysts surveyed by Thomson Reuters, on average, expected earnings of 33 cents on revenue of $4.96 billion. DirecTV's monthly churn rate -- the percentage of customers who left during in the quarter -- fell to 1.33%, a 10-year low. Its operating margin fell to 8.7% from 14.3% on broad cost increases. Average monthly revenue per subscriber rose 0.8% as higher prices were largely offset by promotions and lower pay-per-view and advertising revenue. The metric -- widely viewed by industry players -- fell below Wall Street estimates. Mr. Carey blamed lower demand for pay-per-view events and premium channels, as well as the effects of the economy for the disappointing revenue. In a bid to gain independence and simplify its capital structure, DirecTV said Tuesday it will merge with majority shareholder Liberty Entertainment once that unit is spun off from its parent, John Malone-controlled Liberty Media Corp. -- ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 Mail: antunes at uh dot edu *********************************** * POST TO MEDIANEWS@ETSKYWARN.NET * *********************************** Medianews mailing list Medianews@etskywarn.net http://lists.etskywarn.net/mailman/listinfo/medianews
