DirecTV Adds 240K Subs in Q3 - Broadcasting & Cable

DirecTV Adds 240K Subs in Q3

More than 50% of Gross Subscriber Additions Take HD and/or DVR
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DirecTV’s revenue jumped 18% in the third quarter and the company added 240,000 new subscribers, but net income sank on rising costs.

DirecTV recorded $4.33 billion in revenue in Q3, an 18% rise over the same period a year ago, but operating costs rose 24% in the quarter to $3.76 billion on higher programming and subscriber-acquisition and retention costs. Operating profit before depreciation and amortization rose by 12% to $1 billion while operating profit slid to $566 million from $629 million. The company’s net income was down 14% to $319 million. Earnings per share were $0.27 versus $0.30 a year ago.

DirecTV free cash flow in the quarter was $82 million versus $320 million in the same quarter last year.

The company’s gross subscriber additions in the quarter were 1.032 million, over 50% of which took HD and/or digital-video-recorder services versus 28% in the year-ago quarter, according to the company. Net additions for the quarter were 240,000, leaving the company with 16.56 million customers as of the end of September. The monthly churn rate dropped to 1.61% from 1.8% in the year-ago period.

DirecTV’s average revenue per subscriber rose to $78.79 versus $72.74 in the same quarter a year ago. The rise came on the back of programming-package price increases and higher fees associated with the HD and DVR services.

DirecTV’s shares jumped close to 5% Wednesday morning on the earnings news, trading up$1.20 to $27.32 per share mid-morning. Shares of Liberty Capital -- which will soon take a 38% controlling interest in DirecTV -- were also up Wednesday morning, rising $3.55, or 2.91%, to $125.50 per share.

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