DirecTV Group Inc. (DTV) reported a net income loss for the quarter, as costs soared in connection to premium services.
Net income for the Satellite TV provider was $448 million, or 37 cents a share, down from the $459 million, or 36 cents a share achieved last year.
Overall revenue grew to $4.14 billion from $3.52 billion a year ago. It shows how deeply the costs dug into the profits. The addition of DVR and high definition services were the main culprit in the decline.
The company was able to grow it subscriber base by 128,000 in the quarter, but most analysts were looking for 130,000 to 150,000. The triple-play services offered by cable companies has slowed the growth of subscribers to satellite providers.
“Upgrade and acquisition costs, including capitalized equipment, were higher than the prior year due to the increased number of customers adding HD and DVR services, as well as converting to our MPEG-4 HD equipment,” said Chase Carey, president and chief executive officer of the company. “It’s important to highlight that households with HD and/or DVR services generate superior financial returns due to the significantly greater cash flows compared to homes without these services.”
One major positive for the company was revenue per subscriber grew by 7 percent to $76.43 because of the demand for premium services already mentioned.
Thomas W. Egan, an analyst at Oppenheimer & Co., believes all the positive news is already built into the stock price and has a neutral rating on it.
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