DirectTV 2nd-quarter profit slides despite revenue increase, subscriber additions
By APThursday, August 6, 2009
DirectTV 2Q profit falls despite higher revenue
EL SEGUNDO, Calif. — DirectTV Group Inc. said Thursday its second-quarter profit fell 11 percent, but its revenue climbed as the digital and satellite TV provider signed up new subscribers in the U.S. and Latin America.
Net income slid to $407 million from $455 million in the same quarter last year. Earnings per share were 40 cents in each quarter.
The decline in profit was primarily due to lower operating profit and increased net interest expense due to higher debt balances, DirecTV said.
Revenue for the quarter ended June 30 climbed to $5.22 billion from $4.81 billion.
Analysts projected income of 43 cents per share on revenue of $5.18 billion.
Larry Hunter, interim CEO, said DirectTV’s U.S. net subscriber additions grew 74 percent to 224,000, driven by a 17 percent increase in gross additions.
Hunter also said that strong cost controls offset the impact from slower growth of 1.7 percent in average monthly revenue per subscriber.
Gross additions grew 17 percent, due in part to the first full quarter of marketing DirecTV’s bundled service with AT&T, Hunter said.
DirecTV Latin America also had strong subscriber and financial results despite the recession and other factors, the company said.
Revenue increased 11 percent to $680 million in Latin America, mostly due to strong subscriber growth. The region recorded 128,000 net additions in the second quarter. That more than offset a 13 percent decline in Sky Brazil’s average monthly revenue per subscriber, which was due primarily to a weaker currency compared with the second quarter of 2008, El Segundo, Calif.-based DirecTV said.
During the quarter, the company benefited from a decline in tax expenses from lower earnings before taxes and a $38 million gain associated with the revaluation of liabilities held by Sky Brazil in U.S. dollars.
In June, Chase Carey resigned as DirecTV’s president and CEO to return to News Corp. as Rupert Murdoch’s second in command. Carey, 55, joined News Corp. July 1 as deputy chairman, president and chief operating officer.
