DirecTV (DTV) rose 6% early Wednesday after beating third-quarter targets.
The El Segundo, Calif., direct broadcast satellite company made $370 million, or 30 cents a share, up from the year-ago $95 million, or 7 cents a share. Revenue rose to $3.67 billion from $3.23 billion a year earlier.
Analysts surveyed by Thomson Financial were looking for a 27-cent profit on sales of $3.67 billion.
Said DirecTV: "Although total gross subscriber additions of 1.0 million in the quarter were down 9% compared to the prior year, the more important metric is that we increased the number of higher-quality subscribers added in the quarter by 7% compared to last year. We're seeing that higher-quality subscribers tend to buy more services -- particularly high definition and digital video recorder services -- which is contributing to our strong ARPU growth of 6% in the quarter. The improved subscriber base and higher penetration of advanced services are also the main factors driving the average monthly churn rate down from 1.89% last year to 1.80% in the current period, resulting in 165,000 net subscriber additions in the quarter.
"The increases in both operating profit before depreciation and amortization (including the cost of capitalized set-top receivers under our new lease program) as well as cash flow before interest and taxes are also largely due to the improved customer credit profiles and focus on controlling costs. For example, the total cost to acquire new subscribers was down 8% or $56 million in the quarter due to the significant reduction in lower quality subscribers attained as well as an acquisition cost per subscriber, or SAC, that was relatively unchanged from the prior year despite a 72% increase in new customers added in the quarter with advanced services."