DirecTV Revenue Jumps 22% but Write-Offs Widen Loss

DirecTV Group Inc. on Tuesday posted a wider first-quarter loss, but the satellite television services company added a record amount of net new subscribers.

DirecTV, controlled by Rupert Murdoch’s News Corp. through its Fox Entertainment Group Inc. unit, blamed the wider loss on a charge for the pending sale of its PanAmSat satellite unit.

“They had an outstanding quarter,” said Thomas Watts, an analyst at SG Cowen, pointing to higher net subscriber additions and a lower rate of customer defection.

DirecTV’s net loss widened to $639 million, or 46 cents a share, from $50.9 million, or 4 cents, a year earlier. Revenue for the quarter rose 22% to $2.51 billion.

Results suffered from a noncash charge of $479 million from the pending sale of PanAmSat Corp. DirecTV also wrote off $311 million of previously capitalized deferred subscriber acquisition costs, because of an accounting change.

The accounting change also resulted in an increase of about $60 million in operating costs.

The charges were partially offset by several one-time gains including $387 million from the sale of shares of XM Satellite Radio Holdings Inc.

The El Segundo-based company added a net of 460,000 subscribers to its satellite service, which shattered even the most aggressive Wall Street estimates.

“Strong results were anticipated, but not to this extent,” said Marc Nabi, an analyst at Merrill Lynch in a research note. “Frankly, we are not sure where market share is coming from given relatively stable subscriber numbers from the cable operators.”

DirecTV Chief Executive Mitchell Stern told analysts: “We grew almost everywhere.”

DirecTV shares fell 5 cents to $18.05 on the New York Stock Exchange.