DIRECTV US down 34,000 subscribers; DTVLA up 543,000 in 2Q 2014
Thursday, July 31st, 2014
EL SEGUNDO, Calif. — DIRECTV (NASDAQ:DTV) today reported that second quarter 2014 revenues increased 5% to $8.11 billion, reported operating profit before depreciation and amortization (OPBDA) increased 3% to $2.15 billion, reported operating profit increased 5% to $1.42 billion and reported diluted earnings per share increased 35% to $1.59 compared to last year’s second quarter.
DIRECTV U.S. Segment
DIRECTV U.S. net subscriber losses of approximately (34) thousand improved compared to the prior year period primarily due to an 8% increase in gross additions to approximately 908 thousand, partially offset by a slightly higher average monthly churn rate of 1.55% principally resulting from a more competitive environment. The improvement in gross additions was primarily driven by streamlined promotional offers and investments in retail distributors. DIRECTV U.S. ended the quarter with 20.23 million subscribers.
Subscriber Data (in 000’s except Churn)
Three Months Ended Six Months Ended June 30, June 30, ------------------ ------------------ 2014 2013 2014 2013 -------- -------- -------- -------- Gross Subscriber Additions 908 839 1,799 1,732 Average Monthly Subscriber Churn 1.55% 1.53% 1.50% 1.49% Net Subscriber Disconnections (34) (84) (22) (63) Cumulative Subscribers 20,231 20,021 20,231 20,021
DIRECTV Latin America
DIRECTV Latin America owns approximately 93% of Sky Brasil, 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 DTVLA, had approximately 6.36 million subscribers as of June 30, 2014, bringing the total subscribers in the region to 18.83 million.
Subscriber Data (in 000’s except Churn)
Three Months Ended Six Months Ended June 30, June 30, ------------------ ------------------ 2014 2013 2014 2013 -------- -------- -------- -------- Gross Subscriber Additions(2) 1,311 1,189 2,422 2,370 Average Monthly Total Subscriber Churn(1) 2.10% 3.10% 2.11% 2.51% Average Monthly Post-paid Subscriber Churn(1) 1.90% 2.86% 1.88% 2.31% Net Subscriber Additions(1)(2) 543 165 904 748 Cumulative Subscribers (1) (2) 12,472 11,077 12,472 11,077
Sky Brasil Segment
Second quarter net subscriber additions of approximately 137 thousand were higher than the prior year period due to record gross additions, as well as a lower average monthly churn rate. The increase in gross additions was primarily driven by demand related to the FIFA World Cup. Churn in the quarter was lower than the prior year period due to the termination of subscribers related to the improper crediting of certain customer accounts in the second quarter of 2013.
Subscriber Data (in 000’s)
Three Months Ended Six Months Ended June 30, June 30, ------------------ ------------------ 2014 2013 2014 2013 -------- -------- -------- -------- Net Additions (Disconnections)(1)(2) 137 (80) 246 128 Cumulative (1)(2) 5,617 5,167 5,617 5,167
PanAmericana and Other Segment
Subscriber Data (in 000’s)
Three Months Ended Six Months Ended June 30, June 30, ------------------ ------------------ 2014 2013 2014 2013 -------- -------- -------- -------- Net Additions 406 245 658 620 Cumulative 6,855 5,910 6,855 5,910
1. Based on the results of an internal investigation, DTVLA determined that, beginning in 2012, certain employees of Sky Brasil directed activities which were inconsistent with Sky Brasil’s authorized policies for subscriber retention and churn management. These activities had the effect of artificially reducing churn and increasing the Sky Brasil subscriber base during portions of 2012 and the first quarter of 2013. See DIRECTV’s Current Report on Form 8-K filed with the SEC on June 27, 2013 for further details. Prior year results for subscribers, churn and ARPU have not been adjusted for the findings of this investigation.
2. DIRECTV Latin America subscriber data exclude subscribers of the Sky Mexico service. In addition, DTVLA gross and net additions exclude 1,000 video subscribers acquired in transactions in Brazil during the six months ended June 30, 2013. DTVLA cumulative subscriber counts include these acquired customers.
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