Fitch Upgrades DirectTV Outlook

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Fitch Ratings on Thursday revised the rating outlook on satellite TV service provider DirecTV Group Inc. to “positive” from “stable”.


Fitch also affirmed El Segundo-based DirectTV’s BB senior unsecured debt rating and its BB+ rating on its secured credit facility. “The positive outlook reflects the company’s strong credit protection metrics relative to its rating category, which is primarily attributable to the company’s improved operating profile,” the agency said in a statement.


DirectTV’s shift in strategy from aggressive subscriber growth to focus on subscriber quality is yielding the expected results, Fitch said, with around 86 percent of the company’s gross additions during the first quarter being higher quality subscribers. “The strategy should lower the company’s exposure to bad debt and higher churn while positioning the company to grow ARPU and operating margins, as the higher quality subscribers tend to take higher margin services,” according to the analyst report.

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