The DIRECTV Group Reports Third Quarter 2008
Thursday, November 6th, 2008EL SEGUNDO, Calif. — The DIRECTV Group, Inc. (NASDAQ:DTV) today reported that third quarter 2008 revenues increased 15% to $4.98 billion, operating profit before depreciation and amortization increased 25% to $1.25 billion and operating profit increased 16% to $658 million compared to last year’s third quarter. The DIRECTV Group reported that third quarter net income of $363 million increased 14% and earnings per share increased 22% to $0.33 compared with the same period last year.
DIRECTV U.S. Segment
Net subscriber additions of 156,000 were lower than last year’s third quarter primarily due to a slight decline in gross additions and a monthly churn rate of 1.64%. The decline in gross additions to 1,002,000 was mainly due to the end of the previous AT&T distribution agreement in the former BellSouth territories on April 1, 2008. The increase in churn was principally due to a more challenging economic and competitive environment. DIRECTV U.S. ended the quarter with 17.32 million subscribers, an increase of 5% over the 16.56 million subscribers reported on September 30, 2007.
Subscriber Data (in 000’s except Churn):
Three Months Nine Months Ended September 30, Ended September 30, ------------------- ------------------- 2008 2007 2008 2007 ------ ------ ------ ------ Gross Subscriber Additions 1,002 1,032 2,860 2,861 Average Monthly Subscriber Churn 1.64% 1.61% 1.50% 1.54% Net Subscriber Additions 156 240 560 603 Cumulative Subscribers 17,320 16,556 17,320 16,556
DIRECTV Latin America Segment
The DIRECTV Group owns approximately 74% of Sky Brazil, 41% of Sky Mexico and 100% of PanAmericana, which covers most of the remaining countries in the region. Sky Mexico, whose results are accounted for as an equity method investment and therefore are not consolidated by DIRECTV Latin America, had approximately 1.73 million subscribers as of September 30, 2008 bringing the total subscribers in the region to 5.46 million.
In the third quarter of 2008, DIRECTV Latin America’s gross subscriber additions increased 9% however, net additions declined to 79,000 primarily due to higher monthly churn of 2.13%. The increase in churn was primarily due to a 57,000 downward subscriber adjustment in Sky Brazil as a result of the inconsistent application of churn policies in previous periods. Excluding the adjustment, average monthly churn would have been 1.60% compared to 1.41% in last year’s third quarter due to higher subscriber disconnects in PanAmericana related to its prepaid business, competition and faster growth. The total number of DIRECTV subscribers in Latin America as of September 30, 2008 increased 21% to 3.73 million compared to 3.09 million as of September 30, 2007.
Subscriber Data (in 000’s except Churn):
Three Months Nine Months Ended September 30, Ended September 30, ------------------- ------------------- 2008 2007 2008 2007 ----- ----- ----- ----- Gross Subscriber Additions 315 289 1,052 753 Average Monthly Subscriber Churn 2.13% 1.41% 1.85% 1.40% Net Subscriber Additions 79 161 463 390 Cumulative Subscribers 3,734 3,092 3,734 3,092
More: Earnings Release
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