DirecTV Q2 Results Miss Estimates

(RTTNews) - Satellite television company DirecTV Inc. (DTV) Thursday reported a decline in second-quarter profit, reflecting mainly higher programming costs at both DirecTV U.S., and DirecTV Latin America, as well as increased upgrade and retention spending at DirecTV U.S. Revenues grew 7 percent from last year. Both earnings per share and revenues missed analysts' expectations.

Quarterly revenues reflected higher average revenue per user or ARPU at DirecTV U.S., as well as subscriber growth at DirecTV Latin America and DirecTV U.S., over the last twelve months. However, these increases were partially offset by lower ARPU at DirecTV Latin America mainly due to unfavorable exchange rates, the firm said.

Revenues from DirecTV U.S increased 5 percent to $5.94 billion due to strong ARPU growth along with a larger subscriber base. ARPU increased 4.6 percent to $98.73, and average monthly churn rate remained unchanged at 1.53 percent.

Meanwhile, gross subscriber additions in DirecTV U.S declined to 839 thousand from 863 thousand in the prior year.

The company noted that macro-economic and operational challenges in Latin America impacted its results, particularly in Brazil. DirecTV Latin America owns about 93 percent of Sky Brasil, 41 percent of Sky Mexico and 100 percent of PanAmericana.

DirecTV Latin America revenues climbed 12 percent to $1.69 billion, reflecting strong subscriber growth, but was partially offset by a 10.6 percent decline in ARPU. Net additions of 165,000 were lower than the year-ago period.

In the second quarter, net income attributable to the company declined to $660 million from $711 million in the previous year.

The company said its recent-quarter result was impacted by a $59 million non-cash pre-tax charge due to deconsolidation of DirecTV Sports Network or DSN Northwest resulting from the renegotiation with Seattle Mariners regarding DirecTV's ownership in the venture.

However, earnings per share increased 8 percent to $1.18 from $1.09 per share in the prior year, as the lower net income was offset by share repurchases made over the last twelve months.

On average, 24 analysts polled by Thomson Reuters expected the company to earn $1.33 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly revenues grew 7 percent to $7.70 billion from $7.22 billion last year. Twenty one analysts had consensus revenue estimate of $7.75 billion for the quarter.

Total operating costs and expenses advanced to $6.35 billion from $5.81 billion a year earlier. DTV closed Wednesday's regular trading at $63.28 on the Nasdaq. In Thursday's pre-market, the shares are currently down 5.34 percent.