* Satellite TV provider adds U.S., Latam subscribers
* EPS of $1.20 beats analyst view of $1.07
* Future of NFL Sunday Ticket package uncertain -CEO
* Shares rise 7 pct, hit decade high
(Adds CEO comments on Sunday Ticket package, closing share
By Liana B. Baker
May 7 Satellite TV provider DirecTV
easily beat profit estimates for the first quarter on Tuesday,
as better-than-expected growth in Latin America helped offset
the negative effects of a currency devaluation in Venezuela,
sending shares to a decade high.
The largest U.S. satellite television company, with more
than 20 million customers, managed to boost subscribers even as
cable companies have been losing video customers. Earnings were
stronger than even the most optimistic Wall Street estimates.
Brean Capital analyst Todd Mitchell said DirecTV made more
money off subscribers by charging higher advanced service fees,
instituting price increases and adding more events and movies
for customers to buy. It also charges extra for premium products
such as NFL Sunday Ticket.
DirecTV, a longtime critic of escalating sports programming
costs, left the future of that exclusive football package
hanging in the air on Tuesday.
The company pays a reported $1 billion a year to the
National Football League, in a deal that allows subscribers to
watch football games outside of their local markets on game day.
The exclusive package is an important tool for DirecTV to
attract new subscribers.
Chief Executive Mike White told investors on a conference
call that it has about 4 million Sunday Ticket viewers, with
about half of those paying for the service and the rest getting
it free as part of their subscription.
But DirecTV did not say whether it plans to renew its
contract with the NFL when it expires in 2015. DirecTV has
already said it would consider saving on costs by making its
next deal nonexclusive and available to rival pay-TV companies.
White said he was "optimistic" about the relationship with
the NFL but also hinted that the value to DirecTV of the heavily
marketed package may not be what it once was.
"Let's keep in mind we've got a ways to go here" before the
current contract expires, he said. "But I would say, you know,
it is a pretty mature product as well."
In Latin America, DirecTV added 583,000 subscribers in the
quarter, while analysts polled by StreetAccount expected some
DirecTV's subscriber growth in recent years has stemmed from
Latin America, where it has been tapping into an expanding
middle class with more spending power in countries like Brazil.
It also operates in Colombia, Argentina, Venezuela, Chile and
DirecTV took a $166 million charge in the quarter related to
the devaluation of the Venezuelan currency in February.
In the United States, DirecTV added 21,000 net subscribers.
Wall Street expected 25,000 net subscribers, on average,
according to StreetAccount.
While the company missed estimates in that regard, it was
still in positive territory. Comcast Corp and Time
Warner Cable both lost tens of thousands of net video
subscribers in the first quarter.
Net income attributable to DirecTV was $690 million, or
$1.20 per share, compared with $731 million, or $1.07 per share,
a year ago. Earnings per share rose, even though profit fell, as
the company's share count declined sharply.
Revenue jumped 8 percent to $7.58 billion.
Analysts expected earnings of $1.07 per share on revenue of
$7.5 billion, according to Thomson Reuters I/B/E/S.
DirecTV shares closed 6.9 percent higher at $61.95 on the
Nasdaq on Tuesday. Since a recent low in late February, the
stock is up about 30 percent, more than doubling the gains of
its closest peers.
(Editing by Jeffrey Benkoe and Matthew Lewis)