DirecTV misses analyst expectations in Q3
Michelle Clancy | 07-11-2012
Satellite TV provider DirecTV saw its US churn rate rise to 1.74%, up from 1.62% a year ago and worse than the churn rate of 1.68% that analysts were expecting. The No. 1 satellite broadcaster in the United States said the cancellation rate was driven by its dispute with Viacom in July, which blacked out 26 networks for nine days, including MTV, Comedy Central and VH1.
Overall in the third quarter domestically, DirecTV added 67,000 subscribers, but missed analyst expectations of 105,000 adds. It's a slowdown in growth but still an improvement from the first quarter, where the operator saw its first-ever quarterly loss in the US.
In Latin America, where the company has placed most of its customer acquisition efforts, it added 543,000 new subscribers. That also missed analysts' estimates of 575,000 subscribers.
Net income rose to $565 million, or 90 cents per share, from $516 million, or 70 cents per share, a year earlier. That also missed analysts' estimates of 93 cents per share.
DirecTV's 20 million customers lost Viacom networks after the two could not reach a carriage deal—and the blackout dragged on for longer than any other and led many to question whether regulatory oversight was needed in arbitration processes.
Rival DISH Network meanwhile lost 19,000 subscribers in the third quarter, and reported a quarterly loss due to litigation expenses.