DirecTV Loads Up 301,000 Subs In Q4
Satellite Operator Posts Best Sub Growth in Three Years as Revenue Increases 9%
By Todd Spangler -- Multichannel News, 2/10/2009 9:13:12 AM
DirecTV delivered its best quarterly subscriber growth in three years, adding 301,000 net U.S. subscribers in the last three months of 2008, while net income for the quarter dropped 5%.
Revenue for the quarter ended Dec. 31 was $5.31 billion, up 9% year over year, and earnings per share increased 7% to $0.32 compared with the same period last year.
The satellite operator's 301,000 net adds in the U.S. -- giving it 17.621 million subs at the close of 2008 -- blew past analyst expectations; Sanford Bernstein had projected 214,600 net subscriber additions for the quarter. Analyst consensus estimates were earnings of 33 cents per share, according to First Call, though quarterly revenue was in line with expectations.
DirecTV "continues to defy gravity," Sanford Bernstein senior analyst Craig Moffett wrote in a note.
"The word 'impervious' comes to mind," he said. "Indeed, one could make a case that DirecTV has, at least so far, been as little impacted by the recession as any company in America."
For the full year 2008, DirecTV reported a 76% increase in free cash flow, to about $1.68 billion, which the company attributed higher operating profit before depreciation and amortization, a decline in capex driven by lower set-top box costs and an increase in the use of refurbished set-top boxes.
"Clearly DirecTV's strong brand and message of offering the best television experience in America is resonating with consumers," DirecTV president and CEO Chase Carey said in a statement. "Despite the more challenging economic and competitive landscape, we remained sharply focused on attaining higher-quality subscribers" with its highest gross additions in three years at 3.9 million subscribers for 2008 and the lowest monthly churn level (1.47%) in 9 years.
Carey said revenue and operating income "were impacted by greater promotional activity for both new and existing customers, as well as an increase in the number of customers signing up for advanced services resulting in higher equipment and installation costs."
DirecTV last week told customers it would raise rates, effective March 4, by an average of 4%.
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