The DIRECTV Group Announces Third Quarter 2007 Results

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dfergie

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EL SEGUNDO, Calif.--(BUSINESS WIRE)--Nov. 7, 2007--The DIRECTV Group, Inc. (NYSE:DTV):
DIRECTV Group Revenues Increase 18% to Over $4.3 Billion
  • DIRECTV U.S. Revenues Increase 14% to $3.9 Billion
    • Average Monthly Revenue Per Subscriber (ARPU) Grew 8.3% to $78.79
  • DIRECTV Latin America Revenues Up 67% to $442 Million
DIRECTV Group Operating Profit Before Depreciation and Amortization Increases 12% to $1.0 Billion
  • DIRECTV U.S. Up 11% to $916 Million
  • DIRECTV Latin America Increases 15% to $105 Million
DIRECTV Group Net Subscriber Additions Nearly Double to 401,000
  • DIRECTV U.S. Net Subscriber Additions up 45% to 240,000 Driven by Higher Gross Additions of 1,032,000 and Lower Monthly Churn of 1.61%
  • DIRECTV Latin America Net Subscriber Additions Increase Nearly Fourfold to 161,000 Due to Higher Gross Additions of 289,000 and Lower Monthly Churn of 1.41%
The DIRECTV Group, Inc. (NYSE:DTV) today reported that third quarter revenues increased 18% to $4.33 billion and operating profit before depreciation and amortization(1) increased 12% to $1.00 billion compared to last year's third quarter. The DIRECTV Group reported that third quarter 2007 operating profit of $566 million and net income of $319 million declined 10% and 14%, respectively, compared with last year's third quarter. Earnings per share were $0.27 compared with $0.30 in the same period last year.

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Another key quote from that press release:

The increase in gross additions to 1,032,000 was fueled by dramatic growth in the demand for advanced services -- over 50% of new subscribers in the quarter signed up for HD and/or DVR services compared to only 28% a year ago.
 
All of the above seems to be good news - the part about 50% of new subs getting advanced products is OVER 500k new adds in that category. That is a good sign for them for sure - those advanced product subs have the lowest churn and spend the most.
 
A lot of these folks must be signing up directly through DirecTV, as the retailers are all telling me their sales have taken a noise dive (for both satellite providers)
 
A lot of these folks must be signing up directly through DirecTV, as the retailers are all telling me their sales have taken a noise dive (for both satellite providers)

Bingo - Chase said this was a highlight - they had over 45% of their new sales from their direct channel.
 
Chase made a comment about costs and looking at the HD and DVR products since they charge per the household. Wonder if they'll follow the E* model and have a per DVR charge, sure hope not.
 
Chase repeated - they expect close to 100 National HD channels by year end. And they will add HD locals this year.
 
They are not yet going to reach out nationally to MPEG2-HD customers, they are letting those legacy subs contact them.

But they will start reaching out to those HD subs - starting in L.A.
 
Chase mentioned HD DVR costs going from $430/$440 range to $250. Gee, wonder if that savings is coming from removing ATSC tuners;)
 
aha, finally an AT&T question - Chase said they are talking about their bundling relationship. Not really more than that to add he said.
 
He said that at end of year they expect about 500,000 legacy MPEG2 HD customers will still exist, down from 800,000 at start of year.
 
I'm curious to see how much Dish's retention numbers will be affected. I bet a good number of those additions came from there.
 
All of the above seems to be good news
Losing 792,000 subscribers is never good. I can't, for the life of me, figure out how they can lose customers leading up to football season.

Q3 2006 was not a great quarter, so you have to be careful about the percentage figures they're tossing about.
 
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