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DIRECTV Beats Q3 Earnings, Revenues on Strong ARPU - Analyst Blog

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Leading U.S satellite TV operator, DIRECTV ( DTV ), posted third-quarter 2014 financial results wherein both its top and bottom line surpassed the Zacks Consensus Estimate.

Total revenue came in at $8,374 million, up 6.3% year over year and also ahead of the Zacks Consensus Estimate of $8,316 million. Quarterly GAAP net income was $611 million or $1.21 per share compared with $699 million or $1.28 per share in the year-ago quarter. Moreover, earnings per share of $1.33 breezed past the Zacks Consensus Estimate of $1.25.

Quarterly adjusted operating profit before depreciation & amortization (OPBDA) was $2,039 million, up 5.5% year over year. Adjusted operating profit came in at $1,284 million, up 4.8% from the year-ago quarter.

DIRECTV exited third-quarter 2014 with $1,662 million of cash from operations compared with $1,345 million in the prior-year period. At the end of the reported quarter, DIRECTV had $2,898 million in cash & cash equivalents and $18,311 million of outstanding debt on its balance sheet compared with $2,180 million and $18,284 million, respectively, at the end of 2013.

DIRECTV U.S. Segment

Revenues from this segment totaled $6,506 million, up 5.4% year over year. Quarterly ARPU was $107.27 compared with $102.37 in the year-ago quarter. Quarterly operating profit before depreciation & amortization rose 10.9% to $1,548 million. Operating profit improved 12.8% year over year to $1,113 million.

Average monthly subscriber churn rate in the reported quarter was 1.73% as compared with 1.61% in the year-ago quarter. Quarterly net subscriber losses were 28,000 compared with addition of 139,000 in the year-ago quarter. As of Sep 30, 2014, the U.S. segment had 20.20 million subscribers, up 0.2% on an annualized basis.

In the U.S., pay-TV operators are facing intense competition from large telecom operators like AT&T, Inc. ( T ) and Verizon Communications ( VZ ). Moreover, availability of low-cost video streaming companies like Netflix Inc. ( NFLX ) and Hulu are likely to further increase customer churn, moving ahead.

DIRECTV Latin America Segment

This segment posted revenues of $1,820 million, up 9.5% year over year. Quarterly ARPU was $48.88 as against $49.42 in the prior-year quarter. Quarterly operating profit before depreciation & amortization fell 18.8% to $453 million while operating profit decreased 47.7% year over year to $137 million.

Average monthly subscriber churn rate in the reported quarter was 2.99% versus 2.27% in the prior-year quarter. Quarterly net subscriber losses were 119,000 against addition of 260,000 in the year-ago quarter. As of Jun 30, 2014, DIRECTV's Latin America segment had approximately 12.353 million subscribers, up 9% year over year.

DIRECTV currently has a Zacks Rank #4 (Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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