November 6, 2014 / 12:47 PM / 3 years ago

DirecTV beats estimates on higher fees, loses subscribers

(Reuters) - DirecTV, the No.1 U.S. satellite TV provider, reported a quarterly profit above analysts’ expectations as it earned more from each subscriber in the United States.

The headquarters building of U.S. satellite TV operator DirecTV is seen in Los Angeles, California May 18, 2014. REUTERS/Jonathan Alcorn

But the company, being bought by AT&T Inc for $48.5 billion, lost subscribers for the second quarter in a row to competitors, including cable companies that offer broadband along with video at a discount.

“(DirecTV) always bravely claimed that having best-in-class video would always be enough, but even the bulls knew that eventually the music would stop,” MoffetNathanson analysts Craig Moffett wrote in a note.

DirecTV said it lost 28,000 net subscribers in the United States between June and September because of promotional discounts by rivals, compared with 139,000 net subscriber additions a year earlier.

Analysts had expected it to add 66,000 users, according to market research firm StreetAccount.

Dish Network Corp, the second-largest U.S. satellite TV company, reported lower-than-expected quarterly revenue on Tuesday as it lost pay-TV subscribers due to increased competition.

“Cable companies come with broadband, which is more and more demanded by consumers, and in some cases, Comcast in particular, (offer) a much better video product to go with that broadband,” Pacific Crest Securities analyst Andrew Hargreaves told Reuters.

“And that combination is gaining subs.”

Comcast Corp added 315,000 net high-speed Internet subscribers in the third quarter, a 5.8 percent increase over a year earlier.

DirecTV’s U.S. revenue rose 5.4 percent to $6.51 billion as price increases on programming packages boosted average revenue per user by 4.8 percent.

Net income attributable to the company fell to $611 million, or $1.21 per share, in the quarter ended Sept. 30, from $699 million, or $1.28 per share, a year earlier.

Excluding items, the company earned $1.33 per share, beating the average analyst estimate by 3 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 6.3 percent to $8.37 billion. Analysts on average expected $8.3 billion.

Revenue from Latin America, which accounts for about a fifth of total revenue, rose 9.5 percent.

DirecTV shares were down marginally at $87.42 on the Nasdaq.

Additional reporting by Ronald Grover in Los Angeles; Editing by Robin Paxton, Don Sebastian and Feroze Jamal

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below