DirecTV Swings to a Profit

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DirecTV Group Inc. on Thursday returned to a profit in the second quarter compared with a loss in the year-ago period as subscriber growth drove a 21 percent rise in revenue.


The El Segundo-based satellite television operator reported net income of $161.5 million (12 cents per diluted share) for the second quarter ended June 30, compared with a loss of $13.3 million (1 cent) for the like period a year earlier. Revenue rose 21 percent to $3.2 billion from $2.6 billion in the year-ago period.


Analysts were expecting a profit of 4 cents a share on revenue of $3.14 billion.


The latest results included a tax credit of $31 million that was partially offset by $65 million in debt-related charges.


DirecTV said its net subscriber additions of 225,000 fell from 409,000 in the comparable period of last year due to higher churn, the rate at which customers drop the service. Churn rose to 1.69 percent from 1.49 percent due to strict credit checks of subscribers and competition from competing satellite and cable services.


Total subscribers rose to 14.7 million from 13 million a year ago.


Revenue growth was attributed to greater per-user revenue, which jumped 4.3 percent to average $67.79 last quarter, driven by higher prices for DirecTV programming, an increase in users installing additional set-top boxes and a rise in subscribers purchasing local channels.


Shares of DirecTV settled up 2.7 percent to $15.83 on Thursday.

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