DirecTV beats estimates on higher fees, loses subscribers

November 7
8:42 AM 2014

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.

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.

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