DirecTV parent Hughes Electronics sent some mixed signals Monday, reporting a jump in cash flow and revenue for the latest quarter but slower than expected subscriber growth at its satellite TV biz.
Company, which is in the midst of a merger with smaller rival EchoStar, said total revenue rose 11.3% to $2.2 billion — with a 17.4% jump at DirecTV to $1.8 billion. Cash flow surged 50%. Net losses were about flat at $155 million.
DirecTV added 202,000 subs, below the 225,000-250,000 anticipated. Wall Streeters cited a price increase and enhanced competition from EchoStar, especially at retail outlets like RadioShack; DirecTV recently decided not to sell directly to consumers.
Subscribers are still able to order the DirecTV service at retailers, but dishes are delivered and installed later by a DirecTV rep. Some say EchoStar has been snatching customers at RadioShack in particular, where it now sells its hardware.
Hughes execs, however, stuck to their forecast of 1.2 million new subscribers by year’s end and predicted annual revenue of $6.3 billion for DirecTV, with cash flow of $525-$545 million — above earlier projections.
Hughes, a unit of General Motors, saw its shares rise 3% Monday to close at $10 in a volatile market after falling as much as 8% early in the day.