El Segundo, Calif. - Building on a larger subscriber base, the DirecTV business segment of digital TV entertainment provider Hughes Electronics reported a 19 percent increase in revenues for the second quarter, reaching $1.35 billion, compared with $1.13 billion in the same period last year.
DirecTV added about 745,000 gross subscribers in the second quarter ended June 30. After accounting for churn, net subscriber additions in the three months were 175,000. The company said it had more than 10 million subscribers at the end of the second quarter, a 15 percent jump over the 8.7 million on record following the second quarter of 2000.
'Our revenue growth continues to be driven by our DirecTV businesses in the United States and Latin America,' said Jack A. Shaw, CEO.
However, the company is lowering DirecTV estimates for 2001 net subscriber additions in the United States to about 1.1 million, down from revised full-year guidance of 1.3 million, which in June had been cut from a previously expected 1.5 million to 1.7 million range.
Full-year earnings before interest, taxes, depreciation and amortization (EBITDA) guidance for DirecTV is being revised downward to $250 million to $300 million, a drop from the earlier $350 million to $425 million expected range. EBITDA is a key measure of performance in capital-intensive businesses where start-up costs are high.
DirecTV revenue is projected at $5.5 billion to $5.6 billion for 2001, down from earlier guidance of $5.5 billion to $5.7 billion, which in June had been reduced from a previously expected $5.6 billion to $5.8 billion.
EBITDA for DirecTV in the second quarter was $75 million, compared with $26 million in the year-ago period.
DirecTV is part of Hughes Direct-To-Home Broadcast segment, the company's largest, which had second-quarter revenues of $1.53 billion, a 22 percent increase over the $1.25 billion reported in the same three months last year. The segment had negative EBITDA of $1.3 million in the second quarter, compared with negative EBITDA of $14 million in the same quarter last year.
Overall Hughes revenue for the second quarter - which combines digital TV entertainment, broadband services, satellite-based private business networks and global video and data broadcasting - increased 8.1 percent to $1.99 billion, up from $1.84 billion in the year-ago three months. EBITDA for the second quarter was $82 million, including a one-time charge of $22 million, compared with $179.6 million in the same three months in 2000.
Hughes posted a second-quarter net loss of $156.5 million, compared with a net loss of $69.1 million recorded in the year-ago three months. The decline was due to the reduced EBITDA and increased depreciation and amortization expense in the Direct-To-Home segment.
Hughes, along with parent General Motors, which for months has been part of rumors that include a sale to other companies, including Rupert Murdock's News Corp., is reported close to finalizing a deal. With its rival EchoStar Communications reportedly dropping out of the race to purchase Hughes, a Hughes-News Corp. partnership becomes an even greater possibility.
For the six months, Hughes Direct-To-Home Broadcast segment enjoyed revenue of $3.02 billion, compared with $2.43 billion in the same six months in 2000. EBITDA for the segment over six months was $4.7 million, compared with a negative EBITDA of $23.2 million in the year-ago six months.
Helped out by U.S. subscriber growth, overall Hughes revenue for the six months increased 9.5 percent to $3.88 billion, compared with $3.54 billion in the first half of 2000. EBITDA for the six months was $195.2 million, compared with $332.3 million in the year-ago six months. For the six months, the net loss was $261.8 million, compared with $151 million in the same period last year.