March 28 DirecTV said on Thursday it expects to double its subscriber base and revenue in Latin America in the next five years and increase its operating profit to more than $3 billion.
Much of the satellite TV provider's subscriber growth has been coming from Latin America, where it has been tapping into a middle class with more spending power in countries like Brazil. It also operates in Colombia, Argentina, Venezuela, Chile and Ecuador.
DirecTV, which has 8 million subscribers in Latin America, is planning to reach more than 16 million subscribers in the next five years, according to company handouts at an investor presentation in New York.
Revenue is expected to double to $10 billion in five years, while operating profit before depreciation and amortization will increase from $1.7 billion this year to $3 billion. Annual capital expenditures will rise to $1.6 billion from $1.4 billion this year, according to the handouts.
President of DirecTV Latin America Bruce Churchill said DirecTV's SKY Brasil business, in which it owns a 93 percent stake, is the leading pay TV brand in Brazil. It offers high definition services and digital video recorders similar to its U.S. products.
The company generates more revenue per subscriber in the United States, but it does not have high programming costs for sports in Latin America, which boosts its margins, Churchill said.
In Latin America, regional sports networks do not exist and national sports often are free on the air, unlike in the United States where it pays a premium for sports programming.
Last quarter, the company added 590,000 subscribers in Latin America, which beat analysts' forecasts for 528,0000 according to StreetAccount. The company said demand in Brazil, Argentina and Venezuela was strong.
DirecTV shares were down 33 cents or 0.7 percent on Thursday.