DirecTV, the largest satellite TV provider in the United States, reported a 16 percent increase in fourth-quarter profit amid rising subscriber numbers in Latin America. Net income rose to $718 million, or US$1.02 a share, from US $618 million, or 74 cents, a year earlier, according to the company fourth quarter 2011 financial results.
DirecTV gained 590,000 customers in Latin America, topping the high of 574,000 it gained in the previous quarter, as the company added services to challenge pay-TV rivals like América Móvil. Subscriber gains in the United States were smaller than projected, which may concern investors as DirecTV battles rising programming costs and cable rivals including Comcast, said Michael McCormack, an analyst at Nomura Securities Internationa in New York.
DIRECTV Latin America owns approximately 93% of Sky Brazil, 41% of Sky Mexico and 100% of PanAmericana, which covers most of the remaining countries in the region. Sky Mexico, whose results are accounted for as an equity method investment and therefore is not consolidated by DTVLA, had approximately 4.01 million subscribers as of December 31, 2011 bringing the total subscribers in the region to 11.88 million at the end of the fourth quarter of 2011.
DirecTV gained a net 125,000 American customers, fewer than the 162,000 average estimate of 11 analysts surveyed by Bloomberg. Comcast, the largest cable provider in the United States, on Wednesday reported its smallest quarterly video customer decline since 2007, a loss of 17,000 customers.
DIRECTV's full year 2011 revenues increased 13% to $27.23 billion over last year principally due to strong subscriber and ARPU growth at both DIRECTV Latin America and DIRECTV U.S. Operating profit before depreciation and amortization increased 9% to $6.98 billion while OPBDA margin declined to 25.6% during the period. The margin decline was primarily due to higher programming costs at DIRECTV U.S. mostly associated with program supplier rate increases and the new NFL Sunday Ticket contract. Full year 2011 operating profit increased 19% to $4.63 billion and operating profit margin increased to 17.0% as the lower OPBDA margin was more than offset by the decline in depreciation and amortization expenses at DIRECTV U.S.
DirecTV shares fell 1.99 percent, to $45.38, late Thursday afternoon.
DirecTV’s sales increased 13 percent, to $7.46 billion, exceeding projections. The company said programming costs rose because of network fee increases and expenses related to its NFL Sunday Ticket football content.
DirecTV bought back $1.13 billion of its stock in the quarter, part of the previous $6 billion share-buyback program, which was announced last February.
