) reported mixed financial results for the second quarter of 2012.
The company generated a record high net customer addition in Latin
America, increased ARPU in the U.S., and higher operating margin
Side by side, for the first time in its history, DIRECTV
suffered a quarterly net customer loss in the U.S., in the previous
quarter. Management cited stricter credit standards and reduced
promotional discounts are the primary reasons for net subscriber
loss in the U.S. DIRECTV lost a net 52,000 customers in the last
quarter. The company's closest rival
DISH Network Corp.
) outpaced DIRECTV in terms of net subscriber loss (10,000) in the
DIRECTV is trying hard to establish itself as a premier pay-TV
operator targeting higher-quality subscribers. Management is
confident that it will be able to achieve its long-term financial
goals in 2013 without any hiccup. However, competitive threats to
the pay-TV industry and slow economic growth are near-term
concerns. We believe the stock is fairly valued and, thus, maintain
our long-term Neutral recommendation on the stock.
Increased demand for HD DVR services has induced the company to
focus more on new product development. The Whole-Home DVR
penetration has more than doubled year over year. The company is
also planning to launch a new product called 'Home Media Center' in
the upcoming quarters. The new device not only records five shows
at one time but also has double storage capacity as compared to
traditional HD DVR. The innovative Nomad device, which provides
flexibility to customers to watch programs anywhere, is also
DISH NETWORK CP (DISH): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
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