Here’s Why DirecTV Earnings Are Better Than You Think
Satellite TV provider DirecTV (NASDAQ:DTV) fell short of analysts’ expectations this morning when it reported results after adding fewer subscribers in the United States than expected.
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Profit and revenue both rose for the quarter. Net income rose 8.5 percent to $731 million, or $1.07 a share, up from $674 million, or 85 cents a share, in the year-ago period. Analysts predicted earnings of $1.05 a share. Revenue rose 12 percent to $7.05 billion, narrowly missing analysts’ estimates of $7.06 billion, according to Thomson Reuters I/B/E/S.
DirecTV added 81,000 new subscribers in the U.S. during the January through March period, missing analysts’ average forecast of 92,000, according to StreetAccount data. Still, the traditional television company was able to add subscribers despite increased online competition from companies like Netflix (NASDAQ:NFLX) and Hulu (NYSE:DIS). DirecTV has been using programming like its exclusive NFL Sunday Ticket football package to persuade customers to use its service, fending off competition from Dish Network (NASDAQ:DISH) and Comcast (NASDAQ:CMCSA).
Given that CEO Mike White said the company would focus on keeping existing U.S. customers rather than seeking new ones, the company’s increased subscription numbers are encouraging. DirecTV added a record 593,000 customers in Latin America after having reported 590,000 new customers there in the previous quarter, demonstrating much potential for further growth.
Average monthly revenue per U.S. customer also rose in the quarter to $91.99. The company bought back $1.3 billion of its stock.
DirecTV shares fell 1.18 percent this morning to $47.34. The shares have gained 12 percent this year.