DirecTV Reports Net Subscriber Loss8/02/2012 9:58 AM Eastern
DirecTV reported its first ever quarterly net U.S. subscriber loss in the second quarter, driven by recent moves to reduce churn and attract higher quality paying customers.
DirecTV stock fell as much as 4.2% ($2.09 each) to $48.01 per share in early trading Aug. 2. The stock closed at $48.80 (down 2.6% or $1.30 each).
The No. 1 satellite TV service provider lost 52,000 net subscribers in the period, larger than analysts' consensus estimates of a loss of about 36,000 net customers. The main culprit in the losses appears to be continued efforts by the company to reduce overall monthly churn, which came in at 1.53% in the quarter, in line with expectations.
For the most part, analysts were pleased with the results - the sub losses have been expected and are another sign of the maturation of the video market. On the plus side, revenue rose 7% and operating profit before depreciation and amortization (OPBDA) increased 9.6% in its U.S. operations in the period, indicating that the satellite giant is winning more higher-paying customers. The company ended the quarter with 19.9 million customers in the U.S.
"DirecTV appears to be benefiting from wise, economic consumer retention efforts - a long-term positive for the story," wrote ISI Group media analyst Vijay Jayant in a report Thursday.
The Latin American operations continued to shine in the quarter - revenue increased 20% to $1.5 billion and OPBDA rose 5% to $445 million. The Latin American unit added a record 645,000 net new subscribers in the period, ending the quarter with 9.1 million customers in the region.