DirecTV Surprises in Q3

139K Net New Sub Additions Beat Consensus

DirecTV reported strong third quarter results, outpacing analysts’ consensus estimates for net new subscriber growth which helped drive gains in revenue and cash flow.

DirecTV added 139,000 net new subscribers in the U.S. in the third quarter, ahead of the 70,000 predicted by analysts. The gains helped fuel 7.1% revenue growth to $6.2 billion and operating profit before depreciation and amortization rose 12% to $1.4 billion in the U.S.

But results in Latin America, its perennial growth market, were mixed. Latin American operations added about 260,000 net new subscribers, below analyst consensus estimates of 372,000 additions. Revenue growth at 5.4% was slightly below consensus while OPBDA growth of 23% soundly beat expectations.  

Overall, revenue was up 6% to $7.9 billion and OPBDA rose 15% to $1.9 billion.

"DirecTV's diversified portfolio of businesses across the Americas delivered another solid quarter of consolidated results highlighted by strong top-line growth and continued operational discipline across disparate geographies, macro-economic conditions and competitive environments," CEO Mike White said in a statement. "We continue to extend our position as the world's largest pay TV service by leveraging the strength of our premier brands and our differentiated suite of products and services across the Americas to drive industry leading growth. At the same time, our commitment to profitably grow our businesses through disciplined expense management and productivity improvements was clearly a highlight as operating profit before depreciation and amortization margin expanded driving double digit OPBDA and cash flow growth in the quarter."

Analysts also seemed pleased with the results.

The product investments and loyalty initiatives of late appear to be gaining traction,” wrote Morgan Stanley media analyst Ben Swinburne in a research note.