DIRECTV Nets 275K Subs in 1Q, Crosses 17 Million Mark

DIRECTV's first quarter numbers surprised most everyone except maybe the company itself.

The DBS giant netted 275,000 customers during the three-month period, taking its customer count past the 17 million mark. DIRECTV cited its ongoing HD programming push for part of the success, with CEO Chase Carey saying the company's strategy "of offering the best television experience to higher quality customers continues to drive superior financial results."

In addition to the subscriber gains, Wall Street focused on strong APRU (average revenue per subscriber) growth for the U.S. DBS platform. First quarter ARPU jumped to $79.70, up from $73.40 reported for the same quarter last year.

Also, average monthly subscriber churn fell to 1.36 percent in the first quarter, compared to 1.44 percent for the same period last year.

Carey said challenges that remain include "tightening up" SAC (subscriber acquisition costs), which for the first quarter amounted to $712, which was 7 percent higher than the same period last year. DIRECTV attributed the jump to increased dealer incentives linked to the acquisition of higher quality subscribers and growth among new subscribers purchasing advanced services, partially offset by savings gained from reductions in set-top box costs.

Also, executives recognized the loss of the BellSouth business in April. With the end of the joint sales agreement between the companies, DIRECTV executives said it will become much more important for the service to rely on its direct sales channel.

As for other items, Carey said the DIRECTV 11 satellite should become operational in the third quarter, and that will allow the DBS company to further expand its HDTV slate. Also, Carey said the company's video-on-demand product is set for a roll out at the end of the current quarter.

DIRECTV Group said first quarter revenues increased 17 percent to $4.59 billion, when compared to the same period last year. Net income of $371 million jumped 10 percent when compared to first quarter 2007 numbers.