DIRECTV Revenues driven by U.S. ARPU growth of 4.6% and Strong Latin America Subscriber Growth

El Segundo, Calif., July 31, 2014--DIRECTV  today reported that second quarter 2014 revenues increased 5% to $8.11 billion, reported operating profit before depreciation and amortization(OPBDA) increased 3% to US$ 2.15 billion, reported operating profit increased 5% to US$ 1.42 billion and reported diluted earnings per share increased 35% to $1.59 compared to last year's second quarter.

“Building on our first quarter momentum, DIRECTV delivered yet another excellent quarter of operating and financial results,” said 
Mike White, President and CEO of DIRECTV. “We continue to extend our position as the world’s largest pay TV service with industry leading growth by leveraging the strength of our premier brands and distinctive products and service offerings throughout the Americas.” White added, “DIRECTV Latin America’s second quarter results highlight the tremendous success of our unparalleled FIFA World Cup coverage, while DIRECTV U.S. continues to successfully execute on our overarching goal to balance top line sales with bottom line profitability. Overall, DIRECTV continues to deliver on our strategic imperatives as we prepare for the exciting opportunities that our merger with AT&T will bring to our customers, employees and key stakeholders."

DIRECTV's second quarter revenues increased 5% to US$ 8.11 billion principally due to strong ARPU growth at DIRECTV U.S. as well as subscriber growth at DIRECTV Latin America (DTVLA) and DIRECTV U.S. over the last twelve months. These increases were partially offset by lower ARPU at DTVLA due to unfavorable changes in exchange rates. Reported OPBDA increased 3% to US$ 2.15 billion, while reported OPBDA margin decreased to 26.6% in the quarter. The decline in margin was primarily due to higher programming and subscriber acquisition costs at both DIRECTV U.S. and DTVLA. Reported operating profit increased 5% to US$ 1.42 billion, while reported operating profit margin remained flat at 17.6%. The operating profit margin was unchanged as the lower OPBDA margin was offset by the impact of lower depreciation expense at DTVLA compared to the prior year period.

Second quarter reported net income attributable to DIRECTV increased 22% to $806 million due to the higher reported operating profit, as well as favorable changes on the "Other, net" line of the Consolidated Statements of Operations. "Other, net" was impacted by a US$ 44 million improvement in foreign currency translation at Sky Brasil and a US$ 59 million non-cash pre-tax charge in the second quarter of 2013 due to the deconsolidation of DSN Northwest. Reported diluted earnings per share grew 35% to US$ 1.59 in the quarter due to the higher adjusted net income attributable toDIRECTV and the impact of share repurchases.

DIRECTV's revenues for the first six months of 2014 of US$ 15.96 billion increased 4% principally due to higher ARPU at DIRECTV U.S. as well as subscriber growth over the last year at DTVLA and DIRECTV U.S. These increases were partially offset by lower ARPU at DTVLA primarily due to unfavorable changes in exchange rates. Adjusted OPBDA increased 5% to $4.38 billion and adjusted operating profit increased 6% to $2.94 billion compared with the same period of 2013. Adjusted OPBDA margin remained relatively unchanged in the period, while adjusted operating profit margin expanded from 18.0% to 18.4% due to the impact of relatively unchanged depreciation expense at DTVLA compared to the prior year period. Reported OPBDA and reported operating profit both increased 2% to US$ 4.09 billion and US$ 2.65 billion, respectively, in the first half of the year.

Adjusted net income attributable to DIRECTV increased 11% to US$ 1.65 billion compared with the first six months of 2013 primarily due to higher adjusted operating profit and favorable comparisons on the "Other, net" line of the Consolidated Statements of Operations. "Other, net" was impacted by a US$ 44 million improvement in foreign currency translation at Sky Brasil and a $59 million non-cash pre-tax charge in the second quarter of 2013 due to the deconsolidation of DSN Northwest. These increases were partially offset by an increase in income tax expense related to higher earnings before taxes, as well as higher interest expense associated with an increase in average debt balances. Adjusted diluted earnings per share improved 23% to $3.22 due to the higher net income, as well as the impact of share repurchases. 

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