DirecTV Q3 Revenue Climbs 22%

By Jeff Malester On Oct 22 2001 - 6:00am

Satellite television entertainment provider Hughes Electronics said revenue in its DirecTV direct-to-home digital broadcast segment increased 21.8 percent in the third quarter, reaching $1.57 billion, up from the $1.29 billion recorded in the year-ago three months.

The direct-to-home broadcast segment had negative Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $74.2 million, compared with a negative EBITDA of $17.7 million in the third quarter of 2000.

In the United States, DirecTV reported third-quarter revenue of $1.36 billion, an increase of 18 percent from the $1.15 billion reported in last year's third quarter. Hughes said the increase was primarily due to continued subscriber growth.

DirecTV added 953,000 gross subscribers during the third quarter, and, after accounting for churn, 425,000 net subscribers in the three months.

In addition, DirecTV made a one-time downward adjustment of about 143,000 subscribers. This was designed to correct errors that accumulated over the past 18 months related to subscribers who discontinued service prior to this past June 30, but were counted as active subscribers in the DirecTV database.

As a result, DirecTV had 10.3 million subscribers as of Sept. 30, representing a 14 percent rise over the 9 million customers as of Sept. 30, 2000.

Increased marketing expenses pushed down EBITDA for DirecTV in the United States in the third quarter to $20 million, excluding a one-time $48 million charge primarily related to severance. This compares with EBITDA of $36 million in the third quarter in 2000.

The DirecTV DSL service segment, created following Hughes' April 2001 acquisition of Telocity, enjoyed third-quarter revenue of $9 million.. No comparative financial data is available for the third quarter of 2000. As of Sept. 30, DirecTV DSL had about 73,000 U.S. residential broadband customers, compared with about 23,000 customers as of Sept. 30, 2000.