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DirecTV Q4 Revenue, Subscribers Rise

2/10/2004 01:07:00 PM Eastern

El Segundo, Calif. — An increasing number of subscribers, as well as higher average monthly revenue per subscriber, helped drive up fourth quarter revenue 24 percent at the U.S. DirecTV segment of Hughes Electronics, hitting $2.3 billion, compared with $1.8 billion in the year-ago period.

After accounting for churn, DirecTV U.S. added 405,000 net new subscribers in the fourth quarter, ended Dec. 31, compared with 292,000 year-on-year.

The average monthly revenue per subscriber in the fourth quarter jumped 11 percent, to $71.70, up from $64.70 in the fourth quarter of 2002, due primarily to a price increase and additional fees and revenue.

However, fourth quarter DirecTV operating profit was reduced by nearly half, down to $40 million, from $77 million in the same quarter a year earlier. The lower number was due to increased marketing expenses associated with the rise in number of subscribers and higher acquisition costs per subscriber.

For the 12 months, DirecTV revenue climbed 19 percent, reaching $7.7 billion, up from $6.4 billion the previous year.

Annual net new subscribers increased to 1.2 million for the 12 months, up from 1.1 million in the same period a year ago. Average monthly revenue per subscriber rose 7 percent, to $63.90, from $59.80 for the year.

DirecTV operating profit nearly doubled for the 12 months, hitting $459 million, compared with $249 million, due to the additional gross profit gained from increased revenue.

Boosted by DirecTV subscriber and average monthly revenue per subscriber growth, as well as higher sales of DirecTV set-top boxes, fourth quarter revenue for DirecTV parent Hughes Electronics, rose 20 percent, reaching $3 billion, up from $2.5 billion in the year-ago three months.

Hughes took an operating loss of $113 million in the fourth quarter, compared with an $18 million gain year-on-year, due primarily to a pre-tax charge of $132 million related to last year’s purchase of Hughes by News Corp. The net loss for the quarter was $310 million, compared with a profit of $113 million in the same period in 2002.

Hughes revenue for the full year climbed over 14 percent, hitting $10.1 billion, up from $8.9 billion in 2002. The company reported a $146 million operating profit for the 12 months, compared with a loss of $152 million year-over-year. The year’s net loss was narrowed to $362 million, from a loss of $894 million a year earlier.

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