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DirecTV Q1 Revenue Up 11%

4/15/2002 02:10:00 PM Eastern

El Segundo, Calif. - Strong subscriber growth more than offset reduced average revenue per subscriber helping push DirecTV revenue up 11 percent in the first quarter, hitting $1.5 billion, compared with $1.3 billion in the year-ago period.

DirecTV, the satellite TV service operated by General Motors-owned Hughes Electronics, added 342,000 U.S. subscribers during the three months ended March 31. The company, one month ago, had said it expected 325,000 new subscribers in the first quarter. In the fourth quarter, new U.S. subscribers reached 400,000.

'Even with our best-ever first quarter performance in term s of gross subscriber additions, DirecTV U.S. had strong EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), primarily due to its continued aggressive cost-cutting and churn mitigation efforts,' said Jack A. Shaw, president/CEO of DirecTV parent Hughes Electronics.

EBITDA often drops as the number of subscribers increase due to high marketing costs pegged at acquiring customers.

DirecTV EBITDA in the first quarter was $85 million, compared to EBITDA of $50 million in the year-ago first quarter. This increase was due to the additional gross profit gained from DirecTV's increased revenue, partially offset by higher subscriber marketing costs due to the record gross subscriber additions in the three months.

EBITDA is often used as a measurement of performance in capital intensive businesses such as satellite entertainment.

The $85 million in the first quarter was at the low end of $85 million to $100 million coming from previous guidance. However, the figure is up from $50 million in the first quarter of 2001. EBITDA for DirecTV in the second quarter is expected to range between $110 million and $120 million.

Hughes cut its EBITDA estimate for the year to $525 million, less a charge of $56 million related to a lawsuit, down from a range of $525 million to $575 million in previous guidance.

Hughes expects DirecTV revenue to hit about $1.5 billion in the second quarter of 2002, and the company has revised its full-year revenue prediction to about $6.2 billion, up from a range of $6 billion to $6.2 billion.

Net subscriber additions for the second quarter are estimated between 225,000 and 250,000, excluding rural markets. For the year, net subscriber additions are expected to be about 1.2 million, excluding rural markets, up from a previous range of 1 million to 2 million.

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