DirecTV Misses Q2 Earnings Targets As U.S. Subscriptions Decline

It’s believed to be the first time that DirecTV has lost subscribers in the U.S., and the drop — of 52,000 to 19.9M — was bigger than many analysts expected. In Q2 the satellite company generated $716M in net income, +1% vs last year, on revenues of $7.2B, +9.5%. The revenue figure is right about what the Street anticipated. But earnings at $1.09 a share were short of the $1.14 consensus figure. (There’s no mention of the recent battle with Viacom, which took place in Q3.) DirecTV says that the U.S. sub loss reflects its “greater focus on higher quality subscribers and stricter credit policies.” Expectations aside, the numbers weren’t bad: Revenues from the U.S. operation were +7% to $5.6B with an operating profit of $1.2B, +19.7%. And DirecTV’s Latin America operations were surprisingly strong. They gained 645,000 subscribers, for a total of 9.1M. Revenues there at $1.5B were +20.3%, but unfavorable exchange rates especially with Brazil and Argentina resulted in a 7% drop in operating income to $224M. “DirecTV’s strong second quarter consolidated results reflect the unique benefits from our diversified portfolio of businesses which are driving industry leading top-line and bottom-line results,” CEO Mike White says. The company’s share price is down about 4% in pre-market trading.