DirecTV Ups Revenues and Profits; Pushes Hard for HDTV
EL SEGUNDO, CA, May 11, 2007 - Satnews Daily - DirecTV Group, Inc., the leading U.S satellite pay TV provider, saw growing first-quarter revenues and profits tamed by rising costs stemming in part from the increasing popularity of high definition TV (HDTV), which is being heavily promoted by the company. DirecTV expects to offer 100 HDTV channels by yearend and will launch two HDTV satellites within the year to support this programming surge.
DirecTV said profits rose 43 percent to $336 million this first quarter from $235 million a year earlier. Revenue increased 15 percent to $3.91 billion. It added 235,000 U.S. customers, including twice as many HDTV subscribers in the first quarter of 2006.
DirecTV shares, however, fell on concerns of sluggish growth and higher costs, especially those arising from HDTV.
Some analysts said that while DirecTV managed to slow customer cancellations, it added fewer subscribers in this first quarter than it had a year ago. DirecTV said customer cancellations were 1.44 percent this first quarter, slightly down from 1.45 percent a year-ago. It ended the quarter with 16.19 million U.S. customers. Shares of DirecTV, however, dropped two percent as its financial results showed the cost of attracting and keeping subscribers was higher than expected.
DirecTV-10 and DirecTV-11, both dedicated HDTV satellites, will be launched this year to provide DirecTV with national and local broadcast coverage in HDTV. They will be among the largest and most powerful Ka-band satellites ever launched.
DirecTV in 2004 entered into a contract with Boeing to build three Boeing 702 model satellites: DirecTV-10, DirecTV-11 and a ground spare. These birds will enable DirecTV to significantly expand broadcasting to their customers across the continental United States, Hawaii, and Alaska. In addition to expanded national HDTV broadcasting, standard definition TV broadcasting and interactive TV, DirecTV-10 and DirecTV-11 will provide the capability for DirecTV to broadcast local HDTV to 90 percent of its customers.
