DirecTV Inc. added 275,000 net U.S. direct-broadcast satellite subscribers in
the first quarter and upped its forecast of net adds for the year.
Days after News Corp. agreed to buy control of DirecTV parent Hughes
Electronics Corp., Hughes officials said the quarter's results were better than
expected and took every opportunity to bash cable.
In a conference call to discuss the results, DirecTV president Roxanne
Austin even answered analyst questions about EchoStar Communications Corp.
competition and high-speed-data service offerings with swipes against cable.
"We are very focused on cable," Austin said after someone asked whether
DirecTV was in better shape against EchoStar's Dish Network after those would-be
merger partners had exchanged financial data.
"They don't have a fully competitive digital offering," she said of cable
operators, adding that 40 percent of DirecTV customers in the quarter were
former digital-cable subscribers.
"Cable is not delivering on its digital promise, and we always have," she added.
Hughes said it expects to elevate DirecTV's 11.4 million-subscriber U.S. base
by as many as 850,000 customers, up from prior estimates that topped out at
800,000. (The total current base includes 1.65 million customers in National
Rural Telecommunications Cooperative territories.)
DirecTV also expects about 300,000 new customers -- and more than 250,000
existing customers -- to get a digital-video-recording DirecTV set-top this year,
raising that customer count to just under 1 million as of Dec. 31, Austin said.
She added that DirecTV expects programming costs to rise about 7 percent
this year, down from 8 percent to 9 percent last year, as it aims to improve profit
Monthly churn, or customer disconnects, declined to 1.5 percent in the
quarter, the lowest level for a first quarter in four years, officials said.
Revenue at the DirecTV U.S. unit rose 16 percent in the quarter year over
year to $1.71 billion.
The U.S. DBS unit had a $106 million operating profit in