Hughes 3rd Qtr. DirecTV Revenue Improves By 20%
By Jeff Malester -- TWICE, 10/27/2003
EL SEGUNDO, CALIF.— Continued strong subscriber growth, as well as higher average monthly revenue per subscriber, helped push up third quarter U.S. revenue for Hughes Electronics' DirecTV satellite TV service by 20 percent, reaching $1.9 billion, compared with $1.6 billion in the year-ago period.
Third quarter operating profit before depreciation and amortization for DirecTV U.S. increased 15 percent, hitting $235 million, up from $205 million in last year's third quarter. The rise was attributed to the additional gross profit gained from increased revenue, an improved mix of higher margin revenues and the favorable impact from cost management.
Factoring in augmented marketing expenses associated with the larger gross subscriber additions, higher acquisition costs per subscriber and increased interest expense, net income for DirecTV U.S. dropped to $36 million in the third quarter, ended Sept. 30, down from $151.5 million.
DirecTV U.S. added 811,000 gross subscribers in the third quarter, and, after accounting for churn, 326,000 net subscribers in the same three months, a 58 percent increase over last year's third quarter. Total owned and operated subscribers at the end of the third quarter reached 10.3 million, up from 9.2 million at the end of the same three months in 2002.
DirecTV average revenue per subscriber climbed 8 percent in the third quarter, or $4.50 monthly, to $63.70. Average subscriber acquisition costs increased to $590 in the third quarter, up from $555 in the same quarter in 2002.
For the nine months, U.S. revenue for DirecTV rose to $5.4 billion, up from $4.6 billion in the same period a year ago. Operating profit reached $418.9 million for the period, compared with $171.6 million a year earlier, while net income increased to $171.1 million, up from $160.3 million in the same nine months in 2002.
The Hughes direct-to-home broadcast segment, the company's largest, saw third quarter revenue jump 18 percent, hitting $2.1 billion, while the third quarter of 2002 came in at $1.8 billion.
