Direct TV today reported an increase in first quarter 2011 revenues of 13% to $6.32 billion, operating profit before depreciation and amortization1 (OPBDA) of 12% to $1.77 billion and operating profit of 21% to $1.16 billion compared to last year’s first quarter. DIRECTV reported that first quarter net income increased 21% to $674 million and diluted earnings per share grew 44% to $0.85 compared with the same period last year.
“Building on the momentum of one of our best years ever, DIRECTV delivered another strong quarter of operating and financial results,” said Mike White, president and CEO of DIRECTV. “Record-setting subscriber growth in Latin America and robust customer gains in the U.S. culminated in a nearly two-fold increase in consolidated net additions to 611,000. These industry leading subscriber gains combined with DIRECTV Latin America’s 11.7% ARPU growth and margin expansion of 320 basis points, drove double-digit growth in consolidated revenues and operating profit before depreciation and amortization to 13% and 12%, respectively. In addition, the strength and stability of our cash flow continues to create significant value for our shareholders, as the continuation of our share repurchase program along with net income growth of 21% lifted diluted earnings per share by 44% to $0.85 in the quarter.”
DIRECTV Latin America
DIRECTV Latin America (DTVLA) owns approximately 93% of Sky Brazil, 41% of Sky Mexico and 100% of PanAmericana, which covers most of the remaining countries in the region. Sky Mexico, whose results are accounted for as an equity method investment and therefore are not consolidated by DTVLA, had approximately 3.31 million subscribers as of March 31, 2011 bringing the total subscribers in the region to 9.55 million.
First Quarter Review
DIRECTV Latin America gross additions increased 55% to an all-time record of 765,000 in the quarter largely due to increased demand from the middle market segment mainly in Brazil. The record gross additions and a decline in post-paid churn to 1.43% driven by lower churn in Brazil and Venezuela, resulted in record net additions of 427,000, nearly double last year’s first quarter results. Revenues for DTVLA increased 43% to $1.11 billion in the quarter principally due to strong subscriber growth and an 11.7% increase in ARPU. The increase in ARPU to $61.69 was mostly due to price increases and higher sales of HD and DVR services as favorable exchange rates in Brazil were mostly offset by unfavorable exchange rates in Argentina and Venezuela.
DIRECTV Latin America’s first quarter 2011 OPBDA increased 57% to $384 million and operating profit increased 74% to $219 million, primarily due to the gross profit associated with higher revenue partially offset by higher subscriber acquisition costs associated with the record gross additions. Also impacting operating profit were higher depreciation expenses mostly due to the increase in set-top boxes deployed related to the higher gross subscriber additions attained over the last year.