DirecTV Shares In Q1 Subscriber Wealth
May 28, 2008 1:55 pm DirecTVOvercoming the housing slowdown and a dour economy, DirecTV is crowing about its gain of 275,000 subscribers in the first quarter, which surpassed Wall Street’s expectations.
But the satellite provider also got some bad news, because its wireless-broadband partner Clearwire is teaming up with several of DirecTV’s cable archrivals — as well as Sprint and Google — in a $12 billion WiMax joint venture.
Enjoying a surprisingly strong first quarter, DirecTV’s net subscriber growth represented a 17% gain from the year-ago period. The nation’s largest satellite provider — now with 17 million subscribers, up 5% from a year ago — also saw its lowest first-quarter monthly churn rate in 10 years, at 1.36%.
Some analysts had thought DirecTV, positioning itself as the HDTV leader, would see subscriber gains slow down. The causes cited include a housing construction downturn and the recent customer gains some cable operators — such as Time Warner Cable and Mediacom Communications — and phone companies racked up for the first quarter. DirecTV’s stock price began the week at $25.55 and ended Thursday May 8 at $27.40, up $1.85 (7%) over the period.
“The fact of the matter is we have unique strengths, which we feel in many ways are getting stronger, and we’re competing very effectively against the bundle and other market forces out there,” DirecTV CEO Chase Carey said.
On May 7, just hours before DirecTV did its first-quarter conference call, Clearwire and Sprint Nextel announced they were forming a joint venture with Comcast, Time Warner Cable, Bright House Networks, Intel and Google to create a nationwide wireless-broadband network.
“Bottom line, this is not something that is going to be impacting the business a whole lot in the next couple of years,” Carey said during the earnings call.