DirecTV’s third-quarter profit falls 13% but beats forecasts
DirecTV reported third-quarter profit that beat analysts’ estimates as customers paid more for satellite-TV service in the U.S.
Earnings of $1.33 a share, excluding one-time items, were higher than the average analyst estimate of $1.30. Customer losses at home and in Latin America were offset by revenue per user rising 4.8% in the U.S., according to a statement Thursday from the El Segundo company.
DirecTV’s net income fell 13% to $611 million in part because of currency devaluation in Venezuela. Revenue rose 6.3% to $8.37 billion.
DirecTV relies on live sports packages, such as its recently renewed deal for NFL Sunday Ticket, to help hold on to TV customers and encourage them to pay more as streaming services offered by Netflix Inc. and Amazon.com Inc. gain popularity. The largest U.S. satellite-TV provider’s operating results have been largely overshadowed by its pending sale to AT&T Inc., which is awaiting regulatory approval.
“On first blush, the results were satisfactory,” said Amy Yong, an analyst with Macquarie Capital USA Inc. “Latin American head winds remain but U.S. operating metrics show management is still focused despite the pending deal with AT&T.”
DirecTV’s U.S. customers declined 28,000 from the second quarter to 20.2 million.
The shrinking number of traditional pay-TV subscribers in the U.S. is part of the motivation for DirecTV’s $48.5-billion sale to AT&T. The phone company aims to use the DirecTV business to help sell a broader package of TV, Internet, mobile and land-line phone services. It also gives AT&T an opening to expand business in the faster-growing Latin America market.
On Wednesday, the Federal Communications Commission set February as a tentative time to finish its review of the acquisition after pausing the process last month to resolve disputes over who can inspect TV programming contracts.
DirecTV shares fell 34 cents, or 0.4%, to $87.48 on Thursday. The stock is up 27% this year.
