Hughes Q1 DirecTV Sales Climb 25%
Staff -- TWICE, 4/30/2001
EL SEGUNDO, CALIF. — Due to continued strong subscriber growth, the DirecTV business segment of digital TV entertainment provider Hughes Electronics, called Direct-To-Home Broadcast, enjoyed a 25 percent increase in U.S. revenues during the first quarter, reaching $1.32 billion, compared with $1.06 billion in the year-ago first quarter.
This segment is, by far, the largest at Hughes. However, due to flagging operations at other Hughes satellite units, the company reported an overall net loss of $105.3 million in the first quarter, compared with $81.9 million in the year-ago three months.
Hughes, along with parent General Motors — which, for months, have talked about selling Hughes to other companies, including Rupert Murdoch's News Corp. — had no new information about a potential deal, claiming the company was considering strategic and financial investments from a broad range of interested parties. The only recent development was Murdoch making a presentation to GM's board last week.
DirecTV added 840,000 gross subscribers in the first quarter. After accounting for churn, additions in the quarter were 340,000. As of March 31, DirecTV had more than 9.8 million subscribers, an 18 percent increase over the 8.3 million attained at the same time in 2000.
The Direct-To-Home Broadcast segment at Hughes had Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $6 million, compared with a negative EBITDA of $9.2 million in the same quarter last year. However, operating loss for this segment was extended to $145.5 million, up from $126 million in the same three months in 2000.
"Our DirecTV business continues to be our primary growth driver," said Michael T. Smith, chairman/CEO. "[However,] given the slowing economy, we believe it's prudent to adopt a cautious approach to growth at DirecTV, while focusing even more on maximizing our returns."
Hughes said overall first-quarter revenues climbed 11.2 percent to $1.89 billion, compared with $1.70 billion the previous year. EBITDA for the first quarter was $113.2 million, compared with $152.7 million in the year-ago first quarter. The company's operating loss climbed to $152.5 million, up from a loss of $57.5 million in the same quarter last year.
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