DirecTV Revs Climb 16% In 2Q

DirecTV did not follow in the footsteps of competitor Dish Network-- and that's good news.

The biggest satellite distributor in the country added 129,000 subscribers in its second quarter. This followed news earlier in the week that the second-largest satellite company, Dish, lost 25,000 subscribers--the first time a U.S.-based satellite distributor has had a quarterly subscriber drop.

DirecTV's second-quarter earnings only inched up 1.6% during the period to $455 million, which failed to beat analysts' expectations. The company incurred higher-than-expected interest costs.

Revenue climbed 16% during the period to $4.81 billion, which slightly outpaced analysts' estimates. DirecTV now has 17 million subscribers. Gross subscriber additions were slightly lower than in a similar period of a year ago, at 894,000 for the second quarter.

DirecTV was able to double its cash flow to $224 million from 2007. The company says much of this came from a 35% decline in capital expenditures--about $200 million--particularly from reductions in set-top box costs and lower start-up HDTV infrastructure costs that are now mostly behind for DirecTV.

DirecTV was able to lower monthly churn among customers to 1.49% from 1.58% during the same period a year ago. Company executives say this is important, and will be a focus in the future--especially valuable in a weakening economy.

Chase Carey, president/CEO of DirecTV Group, noted that DirecTV's business was being affected by competitors' heightened marketing efforts. But DirecTV will be combating this with increased special promotion offers.

"The problems of the general economy have had little impact on us," said Carey. "I wouldn't say no impact. But it is certainly limited."

Next story loading loading..