Cord Watch: DirecTV Subscribers Edge Up in 2014, but Growth Rate Slows
DirecTV's year-end price increases and customer signups helped profit exceed analysts' estimates, while investors look ahead to U.S. approval of AT&T Inc.'s takeover of the country's largest satellite-TV service. Fourth-quarter earnings of $1.53 a share beat the average analyst estimate of $1.41, according to data compiled by Bloomberg.
But TV industry observers keeping a close watch on demand for cable and satellite pay-TV services may focus on the company's ability to attract new subscribers. It ended 2014 with 20.35 million U.S. subscribers, up nearly 5% from 20.25 million at the end of 2013.
The pace of growth slowed, however: DirecTV recorded 99,000 net subscriber additions in the U.S. last year, down from 169,000 adds in 2013.
The fourth quarter looked better, with 149,000 U.S. subscribers added, up from 93,000 in the quarter a year earlier.
DirecTV signed up more customers for satellite TV service despite increasing competition from popular online streaming alternatives like Netflix and Amazon. The challenges in the pay-TV market helped first motivate discussions with AT&T. DirecTV's financial performance has since been overshadowed by the deal, however, as the regulatory approval process continues.
The addition of DirecTV will help AT&T sell a broader package of TV, internet, mobile and landline phone services in the U.S. It also will give AT&T a foothold as it expands services to faster-growing markets in Mexico and other parts of Latin America.
"2015 will bring additional challenges to our businesses," DirecTV CEO Mike White said in a statement. "But given our solid continued operating momentum and the pending merger with AT&T, I am confident that we will continue to drive value for our shareholders for the foreseeable future."
DirecTV's revenue rose to $8.92 billion, compared with the $8.91 billion average of analysts' estimates compiled by Bloomberg.
~ Bloomberg News with Ad Age staff ~