DirecTV Posts Narrower 1Q Loss on Revenue

EL SEGUNDO, Calif. (AP) _ DirecTV Group Inc., the nation's largest direct broadcast satellite provider, said Monday that its first-quarter losses narrowed significantly from last year, due to fewer

Monday, May 2nd 2005, 9:49 am

By: News On 6

EL SEGUNDO, Calif. (AP) _ DirecTV Group Inc., the nation's largest direct broadcast satellite provider, said Monday that its first-quarter losses narrowed significantly from last year, due to fewer charges and higher revenue at DirecTV U.S.

The company, controlled since 2003 by Rupert Murdoch's News Corp., said it lost $41.4 million, or 3 cents per share, for the three months ended March 31, down from a loss of $638.8 million, or 46 cents per share, a year ago.

Revenue grew 26 percent to $3.15 billion from $2.49 billion last year.

The 2004 period included charges of $479 million related to the sale of PanAmSat, $311 million from a change in accounting for subscriber acquisition, upgrade and retention costs, and $63 million for the early retirement of PanAmSat's backup satellite due to a failure in its power system.

These changes were partially offset by a 2004 pretax gain of $387 million related to the sale of about 19 million shares of XM Satellite Radio, as well as a $45 million pretax gain from the restructuring of certain contracts in connection with the February 2004 completion of DirecTV Latin America bankruptcy proceedings.

Analysts surveyed by Thomson Financial were looking for the company to post a loss of 1 cent per share on sales of $3.04 billion in the latest period.

``The strong demand for DirecTV U.S.' service throughout the country continued in the first quarter leading to first-quarter records for both gross and net subscriber additions of 1.14 million and 505,000, respectively,'' said Chase Carey, president and CEO.

DirecTV U.S. gross subscriber additions increased by 20 percent to 1.14 million due in part to improved local and international programming, as well as greater distribution mostly through the telephone company partnerships. After accounting for average monthly churn of 1.49 percent in the period, DirecTV U.S. added 505,000 net subscribers during the quarter, an increase of 21 percent year-over-year.

As of March 31, the total number of DirecTV platform subscribers increased 14 percent to 14.45 million from 12.63 million platform subscribers as of March 31, 2004.

The company said DirecTV U.S. generated quarterly revenue of $2.8 billion, an increase of 35 percent year-over-year, primarily due to continued strong subscriber growth, the consolidation of the former NRTC and Pegasus subscribers and higher average monthly revenue per subscriber.