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DirecTV Posts Higher Q3 Sales, Net Income

11/06/2008 11:42:00 AM Eastern

El Segundo, Calif. — The DirecTV Group reported higher revenues and net income for the third quarter, ended Sept. 30.

Third-quarter revenues increased 15 percent to $4.98 billion; operating profit before depreciation and amortization increased 25 percent to $1.25 billion, and operating profit increased 16 percent to $658 million compared with last year's third quarter.

DirecTV said third-quarter net income of $363 million increased 14 percent compared with the same period last year.

“Our strong third-quarter results are entirely consistent with DirecTV's top financial goals to achieve double-digit revenue growth, higher operating margins and significant cash-flow growth,” said Chase Carey, president/CEO of The DirecTV Group. “In an increasingly challenging economic and competitive environment, we're continuing to see strong consumer demand.”

Carey added, “In the U.S., solid DirecTV subscriber growth coupled with a 6.1 percent increase in ARPU drove revenues up 11 percent to $4.3 billion. In addition, our operating margins continued to improve as we capitalized on greater efficiencies and cost controls.”

He said that DirecTV’s U.S. cash flow before interest and taxes grew 85 percent to nearly $600 million as the strong revenue and operating profit growth was combined with a 31 percent decline in capital expenditures.

In the U.S. during the third quarter DirecTV reported net subscriber additions of 156,000, which were lower than last year's third quarter primarily due to a slight decline in gross additions and a monthly churn rate of 1.64 percent. The decline in gross additions to 1,002,000 was mainly due to the end of the previous AT&T distribution agreement in the former BellSouth territories on April 1, 2008. “The increase in churn was principally due to a more challenging economic and competitive environment,” the company said.

DirecTV in the U.S. ended the quarter with 17.32 million subscribers, an increase of 5 percent over the 16.56 million subscribers reported on Sept. 30, 2007. In the quarter, DirecTV U.S. revenues increased 11 percent to $4.32 billion. Among the key factors was programming package price increases as well as higher HD and DVR service fees.

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