DirecTV Posts Q2 Profit, but Analysts Disappointed by Its Sub Growth Shortfall

Aug 4, 2005  •  Post A Comment

DirecTV said Thursday it posted a profit in the second quarter, buoyed by subscriber growth that drove up revenue but generally disappointed analysts.

The El Segundo-based satellite operator, which is controlled by Rupert Murdoch’s News Corp., swung to a profit of $162 million, compared with a loss of $13 million a year ago. The 2005 numbers include a $28 million gain related to the sale of DirecTV Latin America subscribers in Mexico.

Revenue surged 21 percent to $3.2 billion.

The company had 964,000 gross subscriber additions during the quarter, but its net new subscribers number of 225,000 booked in the quarter fell short of analysts’ projections of 300,000 and above. The reason for the shortfall was a higher rate of customer defections, or churn, much of which was the result of disconnections by DirecTV as it looks to improve the credit quality of its subscriber base.