DirecTV reported stronger than expected first quarter results Tuesday, driven by continued robust growth at its Latin American operations and a steady showing in the United States.
DirecTV added a total of 604,000 net new subscribers in the period, the bulk of that growth (583,000) occurring in Latin America. But analysts were also encouraged by steady growth in the U.S. – the 21,000 domestic net new additions were only slightly below consensus estimates of 25,000 additions, and revenue and cash flow growth soundly beat predictions.
“[The] U.S. results indicate [DirecTV’s] strategy to selectively manage gross [additions], focus on retention and grow ARPU is paying off,” wrote Morgan Stanley analyst Ben Swinburne in a research note.
Consolidated revenue rose 8% to $7.6 billion – driven by a 5% increase in the U.S. and a 16% rise in Latin America. Consolidated operating profit before depreciation and amortization (OPBDA) rose 10% to $2.1 billion -- up 8% in the U.S. and 17% in Latin America.
Investors appeared pleased with the results, driving DirecTV shares up 6.9% ($3.99 each) May 7 to $61.95 per share.
"Building on the momentum of one of the largest transitional years in our history, DirecTV delivered another strong quarter of operating and financial results," said
DirecTV CEO Mike White in a statement. "Our industry leading revenue growth of 8% continues to be driven by the strength of our premier brands and popularity of our differentiated product and service offerings across the Americas, as well as our ability to profitably grow ARPU in a challenging U.S. operating environment. At the same time, our adjusted OPBDA margin grew as we remain focused on achieving operational excellence through disciplined expense management and productivity initiatives, while we continue to return cash to shareholders through stock repurchases at an industry leading clip."
DirecTV is scheduled to hold a conference call with analysts to discuss quarterly results at 2 p.m.