Satellite

Latin Beat Drives DirecTV’s Results

5/09/2011 12:01 AM Eastern

DirecTV continued to outpace analysts' estimates in the first quarter, with better-than-expected
subscriber growth in its domestic operations and another
strong performance in its Latin America operations.

The No. 1 U.S. satellite-
TV provider reported
consolidated
revenue of $6.3 billion
(up 12.7%), while
operating profit before
depreciation and
amort izat ion rose
12.1%, to $1.8 billion in
the period.

Net new subscriber
additions of 184,000
in the U.S. outpaced
analyst consensus estimates
of 169,000 additions
in the period.

CEO Mike White told analysts that strong performance
in premium channels and pay-per-view movies
helped drive U.S. results. Pay-per-view revenue
was up 30% in the period, an all-time high. DirecTV
had a solid quarter domestically, White said, though
a rise in promotional off ers from telco and cable competitors
could have a modest impact on churn and net
adds for the year.

“An increase in competitive activity was fully contemplated
when we put our 2011 guidance together, and we
are still on track to hit our key metrics for the U.S. business,”
White said on the earnings call.

Once again, Latin America was the dramatic
growth story. Building on a strong performance in
the fourth quarter (when it added 378,000 customers
and revenue rose 23%), DirecTV Latin America added
429,000 net new customers in the first quarter, more
than 60% better than consensus. Revenue, at $1.1 billion,
was 10% ahead of estimates (and 43% above last
year) and operating income before depreciation and
amortization, at $384 million, was 21% better than
consensus and 57% better than the prior year.

At DirecTV U.S., revenue was up 7.8% to $5.1 billion,
and OIBDA rose 4.4% to $1.4 billion.

“All in all, it’s hard not to like DirecTV,” Sanford Bernstein
cable and satellite analyst Craig Moffett wrote in
a research note.

September