El Segundo, Calif. – Continued subscriber growth and higher monthly revenue per subscriber accounted for a 19 percent increase in quarterly revenue at DirecTV, part of the Direct-To-Home Broadcast segment at digital television entertainment provider, Hughes Electronics. DirecTV revenue reached $1.6 billion in the third quarter, ended Sept. 30, up from $1.4 billion in the year-ago period.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for DirecTV during the third quarter was $196 million, about a ten-fold increase and about 31 percent higher than the company’s original guidance. Excluding a $48 million one-time charge, EBITDA in the same three months in 2001 was $20 million. Increased EBITDA primarily was due to the additional gross profit gained from DirecTV’s increased revenue, lower general and administrative expenses and lower subscriber acquisition costs, said the company.
DirecTV operating profit in the third quarter climbed to $94 million, compared with an operating loss, excluding charges, of $93 million in the same quarter last year.
‘The increases in Hughes’ third quarter revenue and EBITDA were driven mainly by superior operating performance of DirecTV U.S.,’ said Jack A. Shaw, Hughes’ president/CEO, in highlighting the digital TV area. Shaw emphasized reduced distribution costs, improved subscriber activation rates and improved margin as key reasons for healthier DirecTV operating performance in the third quarter.
Overall third quarter revenue in Hughes’ Direct-To-Home Broadcast segment, by far the company’s largest, jumped 13.3 percent, hitting $1.8 billion, up from $1.6 billion in the year-ago three months. The segment reported EBITDA of $139.4 million in the three months, compared with negative EBITDA of $74.2 million the previous year. Its operating loss was reduced to $29.6 million, down from a loss of $245.4 million in the third quarter of 2001.
Consolidated third quarter revenue for Hughes increased 5.3 percent, reaching $2.2 billion, up from $2.1 billion in the year-ago period. EBITDA for the third quarter increased to $243.5 million, compared with $76.5 million year over year. Excluding one-time charges in last year’s third quarter, EBITDA was $141.8 million. The consolidated operating loss for the third quarter was reduced to $23 million, compared with an operating loss, excluding charges, of $138 million in the third quarter of 2001.
Net loss was $13.6 million, down from a net loss of $227.2 million in the year-ago period. The third quarter 2001 net loss includes a charge of $212 million from the write-down of Hughes’ SkyPerfecTV! investment and a gain of $108 million resulting from the sale of 4.1 million shares of Thomson Multimedia common stock.
In the third quarter, DirecTV added 206,000 net subscribers, compared with the original estimate of 250,000 to 300,000. The shortfall was due to increased churn. The company expects 250,000 to 300,000 net subscriber additions for the fourth quarter. Revised full-year net subscription additions are anticipated at 1 million to 1.05 million, compared with the prior full year expectation of about 1.2 million.
DirecTV revenue for the fourth quarter is expected at about $1.75 billion, with revised full-year revenue anticipated at about $6.38 billion, compared with prior guidance of about $6.3 billion. Fourth quarter EBITDA for DirecTV should come in at about $150 million, with revised full year EBITA estimated at about $580 million. Prior full year EBITDA had been estimated at about $525 million to $545 million.
Overall Hughes revenue for the fourth quarter is estimated at $2.4 billion to $2.5 billion. The revised full year estimate of consolidated revenue is $8.9 billion to $9 billion, down from a prior full year estimate of $9 billion to $9.2 billion.
For the nine months, Direct-To-Home Broadcast segment revenue hit $5.2 billion, up from $4.6 billion year over year. The segment report EBITDA of $97.4 million in the period, compared with negative EBITDA of $69.5 million in the same nine months in 2001.
For the nine months, Hughes consolidated revenue increased 8 percent, to $6.5 billion, up from $6 billion in the year-ago nine months. Net loss for the first nine months totaled $325.1 million, compared with a net loss of $489 million year over year.
