Look down near bottom at the *** about new DVR coming out Monday.
NEW YORK (Reuters) 11/3/05 - DirecTV Group Inc. (NYSE
TV - news), the top U.S. satellite television operator, on Thursday posted a quarterly profit versus a year-earlier loss, but shares slipped on disappointing subscriber growth and customer loss rates.
Shares in DirecTV fell 2 percent after it posted a record rate of dropped customers, weighing on subscriber growth, amid stiff competition from cable operators.
"They were somewhat lackluster results in that the financials and the customer adds were somewhat below expectations," said Thomas Eagan, analyst at Oppenheimer & Co.
The company said it added 263,000 new subscribers in the quarter, short of Eagan's forecast of 275,000. Eagan, who rates the stock a "buy," said an 11 percent operating margin was also well below his expectation of 12.5 percent.
Third-quarter net profit totaled $95 million, or 7 cents per share, compared with a net loss of $1 billion, or 73 cents per share, one year ago. Results for the third quarter of 2004 included a charge of some $900 million for an abandoned Internet services project, while 2005 quarterly results included a $14 million charge from Hurricane Katrina losses.
Revenue grew 13 percent to $3.23 billion. Analysts on average had forecast earnings per share of 5 cents, on revenue of $3.25 billion, according to Reuters Estimates.
DirecTV aims to counteract a trend of tapering subscriber growth by offering higher-cost packages, reducing its rate of subscriber losses and entering new ventures with fellow companies controlled by Rupert Murdoch's News Corp. (NYSE:NWS - news).
Chief Executive Chase Carey said the company would eventually bring its service to new devices, a day after Sprint Nextel Corp. (NYSE:S - news) unveiled a venture with four top cable operators for TV on cellphones.
"That is going to be how you continue to expand the DirecTV experience ... beyond simply television," Carey told analysts on a conference call. He add that the company would have "a fair amount of devices of our own."
Chief Financial Officer Mike Palkovic said the extension would include mobile devices and create new relationships between DirecTV and some technology companies.
"There are hardware manufacturers that are logical partners, software players that are logical partners, that want to get into these devices" Palkovic told Reuters.
RECORD CHURN RATE
DirecTV said its churn -- the rate at which customers drop the service -- remained "unacceptably high" but should improve through 2006 as it weeds out subscribers with riskier credit.
Average monthly churn rose to 1.89 percent in the quarter from 1.82 percent a year before. Palkovic said the company strives for churn of no more than 1.5 percent said it may not reach that level in 2006.
"They had the highest churn in their history, and that's a clear disappointment even in the face of low expectations," said Craig Moffett, analyst at Sanford C. Bernstein.
DirecTV expects to lower churn to about 1.7 percent in the fourth quarter and is on track to sign on 1.25 million or more new subscribers for all of 2005, Carey said.
Average monthly revenue per subscriber (ARPU), an industry benchmark, rose to $68.65 from $66.46 a year ago, while the average cost to bring in subscribers rose to $626 from $617.
***Carey said average subscriber costs would rise about $30 in the fourth quarter with its new digital video recorder and high-definition platforms. New DVR shipments begin on Monday.
DirecTV shares are down about 15 percent since the start of 2005, performing well below the Standard & Poor's 500 Index (^SPX - news), which has gained 0.4 percent in the same period.
The stock traded 30 cents lower at $14.26 on Thursday.
Reuters/VNU
NEW YORK (Reuters) 11/3/05 - DirecTV Group Inc. (NYSE
TV - news), the top U.S. satellite television operator, on Thursday posted a quarterly profit versus a year-earlier loss, but shares slipped on disappointing subscriber growth and customer loss rates. Shares in DirecTV fell 2 percent after it posted a record rate of dropped customers, weighing on subscriber growth, amid stiff competition from cable operators.
"They were somewhat lackluster results in that the financials and the customer adds were somewhat below expectations," said Thomas Eagan, analyst at Oppenheimer & Co.
The company said it added 263,000 new subscribers in the quarter, short of Eagan's forecast of 275,000. Eagan, who rates the stock a "buy," said an 11 percent operating margin was also well below his expectation of 12.5 percent.
Third-quarter net profit totaled $95 million, or 7 cents per share, compared with a net loss of $1 billion, or 73 cents per share, one year ago. Results for the third quarter of 2004 included a charge of some $900 million for an abandoned Internet services project, while 2005 quarterly results included a $14 million charge from Hurricane Katrina losses.
Revenue grew 13 percent to $3.23 billion. Analysts on average had forecast earnings per share of 5 cents, on revenue of $3.25 billion, according to Reuters Estimates.
DirecTV aims to counteract a trend of tapering subscriber growth by offering higher-cost packages, reducing its rate of subscriber losses and entering new ventures with fellow companies controlled by Rupert Murdoch's News Corp. (NYSE:NWS - news).
Chief Executive Chase Carey said the company would eventually bring its service to new devices, a day after Sprint Nextel Corp. (NYSE:S - news) unveiled a venture with four top cable operators for TV on cellphones.
"That is going to be how you continue to expand the DirecTV experience ... beyond simply television," Carey told analysts on a conference call. He add that the company would have "a fair amount of devices of our own."
Chief Financial Officer Mike Palkovic said the extension would include mobile devices and create new relationships between DirecTV and some technology companies.
"There are hardware manufacturers that are logical partners, software players that are logical partners, that want to get into these devices" Palkovic told Reuters.
RECORD CHURN RATE
DirecTV said its churn -- the rate at which customers drop the service -- remained "unacceptably high" but should improve through 2006 as it weeds out subscribers with riskier credit.
Average monthly churn rose to 1.89 percent in the quarter from 1.82 percent a year before. Palkovic said the company strives for churn of no more than 1.5 percent said it may not reach that level in 2006.
"They had the highest churn in their history, and that's a clear disappointment even in the face of low expectations," said Craig Moffett, analyst at Sanford C. Bernstein.
DirecTV expects to lower churn to about 1.7 percent in the fourth quarter and is on track to sign on 1.25 million or more new subscribers for all of 2005, Carey said.
Average monthly revenue per subscriber (ARPU), an industry benchmark, rose to $68.65 from $66.46 a year ago, while the average cost to bring in subscribers rose to $626 from $617.
***Carey said average subscriber costs would rise about $30 in the fourth quarter with its new digital video recorder and high-definition platforms. New DVR shipments begin on Monday.
DirecTV shares are down about 15 percent since the start of 2005, performing well below the Standard & Poor's 500 Index (^SPX - news), which has gained 0.4 percent in the same period.
The stock traded 30 cents lower at $14.26 on Thursday.
Reuters/VNU
