DirecTV's U.S. Division Helps Drive Growth

Dow Jones Newswires

DirecTV on Tuesday said strong subscriber growth and price increases in its U.S. business during the first quarter helped to offset weakness in Latin America, as the satellite-television provider said it expects its deal to be bought by AT&T Inc. to close in the current quarter.

Overall, profit and revenue came in below Wall Street expectations for the quarter. Shares of DirecTV, up 13% in the last year, edged down 0.3% in morning trading to $90.15.

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The $49 billion deal between AT&T and DirecTV is expected to be yet another major transformation for the communications industry. The combination is expected to give AT&T a differentiated offering when trying to win wireless customers or sell large packages of telecom, Internet and video services.

In the most recent period, DirecTV's U.S. division added a net 60,000 new customers, compared with 12,000 additions a year earlier. Its churn rate was 1.37%, down from 1.45% a year earlier and its lowest first-quarter rate in six years.

U.S. revenue grew 6.1% to $6.46 billion. Average monthly revenue per subscriber, meanwhile, rose to $105.62 from $100.16 a year earlier due in part to price increases on programming packages and regional sports networks.

Overall, the company posted quarterly earnings of $730 million, or $1.44 a share, up from $561 million, or $1.09 a share, a year earlier.

Revenue grew 3.7% to $8.14 billion.

Analysts polled by Thomson Reuters had projected earnings of $1.53 a share and revenue of $8.15 billion.

In its Latin America division, subscriber growth slowed to 219,000 net additions in the latest quarter from 361,000 a year earlier.

Churn rate grew to 2.15% from 1.85%, while revenue fell 5% to $1.64 billion. Its average monthly revenue per subscriber fell to $43.32 from $48.83 a year earlier.

DirecTV said its results in Latin America were weighed by foreign exchange headwinds.