Viewers still want their satellite TV, but DirecTV (NYSE: DTV) paid more to add new subscribers and keep its existing ones, which hurt profits. The company’s first-quarter 2009 revenue grew 7 percent to $4.9 billion (just below analyst expectations of $5 billion) and earnings per share decreased 38 percent to $0.20 (versus analyst expectations of $0.33).
–The company added 460,000 net subscribers, up 67 percent over the number added the same quarter last year.
–Subscriber acquisition costs increased 22 percent, to $709 million, while upgrade/retention costs increased 8 percent, to $281 million.
–Average revenue per user (ARPU) grew only 1 percent due to promotions and discounts for new subscribers.
–DirecTV Latin America continued to grow, adding 148,000 net subscribers during the quarter, but at a slower rate; it added 200,000 subscribers in the first quarter of 2008.