DirecTV Swings to Profit

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DirecTV Group Inc. said Thursday it returned to a profit for the third quarter, as strong subscriber growth and higher average monthly revenue per subscriber helped boost revenue.


The El Segundo-based broadcast satellite provider reported third-quarter net income of $94.6 million (7 cents per share), compared with a loss of $1 billion (73 cents) for the like period a year earlier. Revenue rose 13 percent to $3.2 billion.


Results for the third quarter of 2004 included a charge of $903 million related to delivery of its Spaceway satellite, which will enable DirecTV to broadcast local high-definition television channels in several of the nation’s largest markets.


Analysts had forecast earnings per share of 5 cents on revenue of $3.28 billion.


DirecTV U.S. quarterly revenues increased 22 percent to $3.1 billion over year-earlier revenues. Revenues for DirecTV Latin America rose 13 percent to $185 million.


The company’s average monthly churn rose to 1.89 percent in the quarter from 1.82 percent a year ago. Average monthly revenue per subscriber, an industry benchmark, rose to $68.65 from $66.46 a year ago, while the average cost to bring in new subscribers rose to $626 from $617.


DirecTV said its churn, the rate at which customers drop the service, remained “unacceptably high” but should improve in the fourth quarter and into 2006 as it adds subscribers with better credit profiles.


DirecTV shares fell 2 percent to settle at $14.27 on Thursday.

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