DirecTV Reports Q4 Profit

Feb 8, 2006  •  Post A Comment

Satellite operator DirecTV Group said Wednesday that it swung to a fourth-quarter profit, even as subscriber growth fell short of its own projections.

The company reported a quarterly profit of $121 million, compared with a year-earlier loss of $289 million. Revenue rose 7 percent to $3.6 billion. For the year, DirecTV generated profit of $336 million versus a loss of nearly $2 billion a year ago, while revenue advanced 16 percent to $13.2 billion.

Despite the return to profitability, the company said its fourth-quarter growth of 965,000 gross new subscribers was off 13 percent compared with a year ago.

The company blamed that figure on strengthened credit guidelines for new subscribers and the termination of certain third-party resellers that were unable to meet DirecTV’s more stringent credit guidelines. Those efforts helped DirecTV reduce its monthly churn rate to 1.70 percent from 1.89 percent in the third quarter.

The company also said it lost around 10,000 subscribers in the Gulf Coast region during the quarter due to Hurricane Katrina.

For the year, DirecTV said it had 15.1 million subscribers, an increase of 9 percent over the previous year.