DirecTV (NASDAQ: DTV), a provider of digital television entertainment in the U.S. and Latin America, reported an increase in its first-quarter profit and revenue. However, shares of the El Segundo, California-based company have opened lower in early trading as it added fewer-than-expected subscribers in the first quarter.
DirecTV added 81,000 new subscribers in the U.S. in the first quarter, compared with Street estimates of addition of 92,000 new U.S. subscribers. In Latin America, meanwhile, the company added 593,000 new subscribers. This compares with Street estimates of 543,000.
The subscriber growth in Latin America has been rising as DirecTV continues to tap into a middle class with more spending power, especially in countries like Brazil. Apart from Brazil, DTV operates in Colombia, Argentina, Venezuela, Chile and Ecuador in Latin America.
Meanwhile, in the U.S., DTV said that it focused on “higher quality subscribers” in the first quarter. DTV also said that it used stricter credit policies with new customers in the first quarter.
DirecTV’s churn rate fell to 1.44% in the first quarter of 2012, an improvement from 1.52% reported for the same period in the previous year. At the end of the quarter, the company had 19.97 million subscribers.
DirecTV’s revenue per subscriber was $91.99 in the first quarter, an increase of 3.6%. The increase was mainly due to higher prices on programming packages and the cost of leasing boxes.
DirecTV’s net income for the quarter was $731 million, or $1.07 per share, compared with $674 million, or $0.85 per share reported for the same period in the previous year. Analysts surveyed by Thomson Reuters were expecting the company to report earnings of $1.06 per share.
Revenue for the quarter rose 12% to $7.05 billion, slightly below Street estimates of $7.06 billion.
DirecTV shares have opened lower in trading today. At last check, the stock was trading 2.37% lower at $46.77. DirecTV shares have gained 9.38% so far this year.
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