* Forecasts financial hit in '13 on Venezuela's currency
* Authorizes $4 billion share buyback program
* Subscriber additions in Latin America beat estimates
* Reports fourth quarter profit $1.55/share, rev $8.05 bln
* Shares rise 3.5 percent in premarket trading
By Liana B. Baker
Feb 14 DirecTV announced a $4 billion
share buyback on Thursday, helping to soften the blow to
investors after the satellite TV provider warned of a 2013
financial hit from Venezuela's recent currency devaluation.
Shares of DirecTV rose 3.5 percent in early trade after it
also reported an increase in its quarterly profit and revenue
due to subscriber growth in the fourth quarter.
While the quarter was roughly in line with his expectations
Brean Capital analyst Todd Mitchell said the buyback, which is
equivalent to about 12 percent of DirecTV's market value, was a
big surprise compared with his expectation of $3 billion.
"That makes it the highest buyback in the cable and
satellite space this year," said Mitchell, who noted that cable
rivals Time Warner Cable and Comcast Corp
would offer lower returns to investors this year.
Mitchell said, however, that he would like to see more
details about DirecTV's exposure to the devaluation in
Venezuela, which he said represents roughly 3.5 percent of
DirecTV said it would incur a related one-time pre-tax
charge of $160 million.
The devaluation will have "an ongoing unfavorable financial
impact to DirecTV's Latin America's revenues, earnings and cash
flow growth related to the translation of the local currency
financial statements to the new official exchange rate," DirecTV
Mitchell said DirecTV's ability to grow its business faster
than U.S. rivals is dependent on its Latin American presence.
In the United States, DirecTV added 103,000 net subscribers.
In Latin America, the greatest driver of its business, it added
658,000 net subscribers. Analysts were expecting net additions
in Latin America of 601,000, according to StreetAccount.
U.S. churn, or the rate of subscriber cancellations,
improved to 1.43 percent, from 1.52 percent a year ago.
Net income attributable to DirecTV rose to $942 million, or
$1.55 per share, compared with $718 million, or $1.02 per share
a year ago.
Revenue rose 8 percent to $8.05 billion. Analysts were
expecting $8.03 billion, according to Thomson Reuters I/B/E/S.
The company also authorized a new $4 billion stock
In December, DirecTV Group said its service fees will rise by
an average 4.5 percent in February due to increasing programming
DirecTV shares rose to $53.50 in pre-market trading after
closing at $51.67 on Nasdaq.