DIRECTV U.S. Revenues Increase 6% in the 1Q 2015 Including a 5.5% Increase in ARPU.

El Segundo, Calif., May 5, 2015--DIRECTV (NASDAQ:DTV) reported first quarter 2015 results highlighted by solid subscriber growth across the Americas and strong revenue growth at DIRECTV U.S. resulting from improved ARPU and churn performance.  DIRECTV U.S. added 60,000 net new customers in the quarter driven by the lowest first quarter average monthly churn rate in six years of 1.37%.

“Our U.S. business generated another strong quarter of results, further demonstrating our company's strong execution, as well as product and brand leadership,” said 
Mike White , president and CEO of DIRECTV.

“In the quarter, our focus on high-quality new customers combined with an improving economy to enable our lowest first quarter churn rate in six years. Just as impressive was our highest first quarter ARPU growth in five years, as we continue to generate demand for higher-end services and packages, as well as successfully pass through programming cost increases to our customers." White added, "In Latin America, challenging foreign exchange headwinds in Brazil weighed on our U.S. dollar results. However, performance in PanAmericana, excluding Venezuela, is exceeding our expectations as the unit grew revenues 19% and OPBDA 33% in U.S. dollar terms." White finished, "We remain confident that our transaction with AT&T will close in the second quarter, and we are excited to carry our strong operating momentum forward to help create a unique new market leading company," White added.

In the quarter, DIRECTV U.S. revenues increased 6% to US$ 6.46 billion compared with the first quarter of 2014 primarily due to strong ARPU growth along with a larger subscriber base. ARPU increased 5.5% to US$ 105.62 mostly due to price increases on programming packages and regional sports networks, higher set-top box lease fees, increased advanced receiver service fees, a reduction in new customer credits, as well as increased commercial business revenues, warranty program fees and ad sales. These improvements were partially offset by increased promotional offers to existing customers.

DIRECTV U.S. net subscriber additions of 60,000 were 48,000 higher than the first quarter of 2014 primarily due to a lower average monthly churn rate. The churn rate in the quarter declined 8 basis points to 1.37% compared to the prior year period mainly due to a continued focus on attracting higher quality new subscribers and improved macroeconomic conditions which resulted in higher customer pay rates, as well as successful winback offers. Gross additions of 895,000 were relatively unchanged from the prior year period. DIRECTV U.S. ended the quarter with 20.41 million subscribers.

First quarter OPBDA and operating profit both increased 1% to US$ 1.69 billion and US$ 1.25 billion, respectively. OPBDA margin and operating profit margin declined to 26.1% and 19.3%, respectively. The change in margins was principally due to higher programming costs primarily related to programming supplier rate increases. The margin decline was also impacted by higher subscriber acquisition expenses driven by an increase in higher quality customers coming from the consumer electronics distribution channel, higher ancillary equipment costs, as well as higher retention and upgrade costs mainly resulting from improved results from our customer winback campaigns. Also impacting the comparison was a one time favorable adjustment to programming costs resulting from the resolution of a prior year programming dispute, according to the company.

Related Articles: