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DirecTV Shows Strong Revenue, Profit Growth

5/04/2006 02:16:00 PM Eastern

El Segundo, Calif., — DirecTV Group’s U.S. segment reported stronger revenue growth and a doubling of its profit during the first quarter, ended March 31, which it readjusted its subscriber strategy to go after “higher quality” consumers.

Revenue grew by 14 percent to $3.19 billion, and operating profit more than doubled to $545 million compared to the same time last year, according to Chase Carey, president/CEO.

“In addition to the strong financial performance, first-quarter results also reflect the benefits gained from our strategy to attain higher quality subscribers. DirecTV’s stricter credit policies and revised dealer incentives implemented over the past several quarters have impacted both our gross and net subscriber growth,” Carey added.

“DirecTV Group U.S. gross additions of 919,000 were down 19 percent compared to last year, but more importantly the number of high-quality subscribers added in the period actually increased more than 13 percent over the prior year,” he said.

The continued improvement in the quality of our subscriber base contributed to the first year-over-year improvement in churn in nearly two years as average monthly churn fell to 1.45 percent in the quarter, he noted. The lower gross additions combined with the improved churn rate resulted in net additions of 255,000 subscribers in the quarter, Carey said.

During the quarter the average monthly revenue per subscriber was $69.75, a 6 percent increase over last year. DirecTV said it was due to programming package price increases as well as higher mirroring, lease, digital video recording and HDTV programming fees.