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DirecTV Profits Up In Q1

5/08/2008 03:22:00 PM Eastern

El Segundo, Calif. — DirecTV Group posted a 10 percent increase in first-quarter net income, the company reported today.

For its first quarter, ended March 31, revenues climbed 17 percent vs. the year-ago quarter, to $4.59 billion. Operating profit was also up 17 percent vs. the year-ago quarter to $657 million.

The company added 275,000 net subscribers and enjoyed a 1.36 percent monthly churn rate through the quarter, the lowest in 10 years, the company said. Its domestic subscriber base stands at 17.1 million.

DirecTV also announced that Liberty Media would restrict its voting interest in the company to 48 percent in exchange for DirecTV’s move to buy back more of its shares. The company will spend $3 billion on its share-repurchase program thanks to $2.5 billion in new debt that it plans to secure in the coming weeks.

Half of all new subscribers for the quarter were advanced customers, purchasing HD or DVR services, said Chase Carey, DirecTV CEO, in an earnings conference call. More than 7 million DirecTV customers are advanced service subscribers with an average monthly bill of $100 a month — 50 percent more than a customer without advanced services, he said.

The growth in higher-paying customers owes to the company’s direct sales efforts, Chase said.  The loss of Bellsouth has made the company rely more heavily on its direct sales and dealer channels, Chase added. Dealer compensation has also been changed to encourage the acquisition of more advanced subscribers, he said.

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