DirecTV (DTV) Tops Q2 EPS by 6c

DirecTV (NASDAQ: DTV) reported Q2 EPS of $1.59, $0.06 better than the analyst estimate of $1.53. Revenue for the quarter came in at $8.11 billion versus the consensus estimate of $8.01 billion.

Second Quarter Review

In the quarter, DIRECTV U.S. revenues increased 6% to $6.27 billion compared with the second quarter of 2013 primarily due to strong ARPU growth along with a larger subscriber base. The ARPU increase of 4.6% to $103.26 was driven by price increases on programming packages, higher advanced receiver service fees, higher fees for the new enhanced warranty program, as well as increased commercial business and ad sales revenues. These improvements were partially offset by increased promotional offers to new and existing customers.

DIRECTV U.S. net subscriber losses of approximately (34) thousand improved compared to the prior year period primarily due to an 8% increase in gross additions to approximately 908 thousand, partially offset by a slightly higher average monthly churn rate of 1.55% principally resulting from a more competitive environment. The improvement in gross additions was primarily driven by streamlined promotional offers and investments in retail distributors. DIRECTV U.S. ended the quarter with 20.23 million subscribers.

Second quarter OPBDA increased 6% to $1.75 billion and OPBDA margin improved slightly from 27.8% to 27.9% principally due to higher revenues combined with lower upgrade and retention expenses mostly related to reduced equipment costs, as well as relatively unchanged general and administrative expenses. These improvements were mostly offset by higher subscriber acquisition costs associated with the increase in gross additions and higher programming costs primarily related to programming supplier rate increases. Operating profit increased 6% to $1.32 billion and operating profit margin was up slightly from 20.9% to 21.0% in the second quarter mainly due to the higher OPBDA and OPBDA margin.

For earnings history and earnings-related data on DirecTV (DTV) click here.

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