DirecTV 2Q profit rises 33 pct as it attracts US cable customers, builds Latin American base

DirecTV 2Q profit up 33 pct on subscriber growth

DirecTV Inc. on Thursday said second-quarter profit rose by 33 percent as the satellite TV company attracted customers from its U.S. cable rivals and Latin American operations took off in part due to the World Cup fervor.

The nation’s largest satellite TV provider said it added 100,000 net U.S. subscribers in the quarter. While that was down from 224,000 in the same quarter last year, when it was helped by the shutdown of analog broadcast TV signals, DirecTV remains one of the few subscription TV providers that is adding video customers. Most major cable companies are not.

DirecTV reported net income of $543 million, or 42 cents per share, for the period ended June 30, up from $407 million, or 40 cents a share, a year earlier.

The latest results include a hit of 18 cents per share from swapping former chairman John Malone’s Class B shares for Class A shares. Without the Malone deal’s impact, DirecTV would have earned 60 cents per share.

Revenue rose 12 percent to $5.85 billion from $5.2 billion a year ago.

Analysts polled by Thomson Reuters had on average forecast earnings of 60 cents per share on $5.73 billion in revenue. The earnings estimates typically exclude one-time items.

Free cash flow, a key metric of capital-intensive industries such as satellite TV, fell 30 percent to $383 million.

U.S. customers on average paid $87.90 a month, up from $83.16 a year ago. The increase was driven by higher prices and increased high-definition and DVR service fees. Pay-per-view, premium movie and advertising sales also rose.

In Latin America, it added 415,000 subscribers, more than three times last year’s 128,000 additions. DirecTV owns 74 percent of Sky Brazil, 41 percent of Sky Mexico and all of PanAmericana, which covers most of the remaining countries in the region.

DirecTV ended the quarter with 18.8 million subscribers in the U.S. and 5.2 million in Latin America, excluding Sky Mexico, in which DirecTV owns an investment stake.

Shares of the El Segundo, Calif., company rose $1.06, or 2.8 percent, to $38.96 in afternoon trading.

AP Technology Writer Peter Svensson in New York contributed to this story.