DirecTV reported a net loss of 28,000 TV subscribers in the U.S. for the third quarter — a worrisome sign for the No. 1 satellite operator, which may be feeling the brunt of cord-cutting and heightened competition — while total revenue grew 6%, to $8.37 billion.
The top-line increase was primarily because average revenue per customer in the U.S. grew 4.8%, to $107.27 per month, along with subscriber growth at DirecTV Latin America. Those were partially offset by lower ARPU for Latin American territories because of unfavorable changes in exchange rates, DirecTV said.
“In the U.S., although competition for subscribers continues to be intense, revenue growth was very solid while operating profit before depreciation and amortization margin expanded year-over-year for the fifth consecutive quarter,” DirecTV CEO Mike White said in a statement.
DirecTV is in the process of being acquired by AT&T, pending regulatory reviews.
DirecTV posted adjusted net income — excluding a $62 million charge for unfavorable exchange rates in Venezuela — of $673 million, or $1.33 per share (with EPS up 4% year over year because of share repurchases). Analysts had forecast $8.3 billion in revenue and an EPS of $1.30 for the satcaster’s third quarter.
Subscriber churn in the U.S. increased to 1.73% for the quarter, up from 1.61% in Q3 2013. U.S. programming costs rose 5.3% year over year, to $3.06 billion in the most recent quarter.
In Latin America, DirecTV lost a net 146,000 subscribers in the third quarter of 2014 compared with net adds of 172,000 in the prior-year period. That was primarily due to lower prepaid reconnection rates following the 2014 FIFA World Cup tournament, according to the company.
Dish Network also lost subs in Q3, reporting a net decline of 12,000 for the period.