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DirecTV U.S. Q2 Revenue Soars 23%, Sub Adds Rise

8/06/2004 02:04:00 PM Eastern

El Segundo, Calif. — Continued strong subscriber growth and higher average monthly revenue per subscriber generated a 23 percent increase in second quarter revenue for DirecTV U.S., hitting $2.2 billion, up from $1.8 billion in the year-ago period.

Average U.S. monthly revenue per subscriber for the satellite TV broadcast company reached $65 in the three months, ended June 30, a 7 percent increase over the $60.90 reported in the same period in 2003. The rise was primarily due to a March 2004 programming package price increase, higher mirroring fees from an increase in the average number of set-top receivers per customer and an increase in the percentage of customers subscribing to local channels.

However, the DirecTV U.S. segment operating profit before depreciation and amortization declined to $175 million in the first quarter, down from $325 million the precious year, while operating profit dropped to $63 million in the same time frame, compared with $201 million year-on-year. The decreases were attributed mainly to increased subscriber acquisition costs related to record gross subscriber additions and higher subscriber acquisition costs resulting from an increase in the average number of set-top boxes and DVRs purchased by new subscribers.

Average subscriber acquisition costs per subscriber rose to $645 in the second quarter, up from $595 in the same period a year ago.

The company passed the 13 million subscriber mark overall in the second quarter, compared with 11.6 million subscribers on board a year ago. Net owned and operated subscriber additions hit 455,000 in the second three months, up 151 percent, while gross owned and operated subscriber additions climbed 49 percent, to an all-time high of 944,000 in the same quarter.

Consolidated DirecTV revenue increased 21 percent in the second quarter, hitting $2.6 billion, up from $2.2 billion in the same three months last year.

Consolidated operating profit before depreciation and amortization slipped to $143 million in the three months, down from a year-over-year $251 million, while the company reported an operating loss of $28.3 million in the quarter, compared with an operating profit of $66 million in the year-ago three months. The net loss was $13.3 million, compared with net income of $21.6 million.

Lower operating numbers primarily were due to increased subscriber acquisition costs related to the record gross subscriber additions and higher acquisition costs per subscriber.

For the first six months, DirecTV consolidated revenue increased 21 percent, to $5.1 billion, from a year-on-year $4.2 billion. Operating loss reached $124.5 million, compared with a year-earlier operating profit of $31.7 million. The six-month net loss widened to $652.1 million, up from a year-ago net loss of $29.3 million.