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Guest Message by DevFuse

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DIRECTV Announces Q4-2011 and Full Year 2011 Results - Conf Call Today


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#1 OFFLINE   Sixto

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Posted 16 February 2012 - 06:41 AM

http://investor.dire...eleaseID=649162

Overall:

EL SEGUNDO, Calif.--(BUSINESS WIRE)-- DIRECTV (NASDAQ-DTV) today reported increases in fourth quarter 2011 revenues of nearly 13% to $7.46 billion, operating profit before depreciation and amortization1 (OPBDA) of 6% to $1.78 billion and operating profit of 14% to $1.21 billion compared to last year's fourth quarter. DIRECTV also reported that fourth quarter net income increased 16% to $718 million while diluted earnings per share grew 38% to $1.02 compared with the same period last year.

"Our fourth quarter results capped off another strong year of industry leading growth as we further extended our position as the world's largest provider of pay television services with nearly 32 million subscribers in the U.S. and Latin America," said Mike White, president and CEO of DIRECTV. "Strong consumer demand for DIRECTV and SKY's premium brands drove full year gross additions in both our U.S. and Latin American businesses to all-time highs fueling the largest annual net gain in DIRECTV's history of nearly 3.7 million subscribers including Sky Mexico. The tremendous subscriber performance along with solid ARPU growth fueled an acceleration of full year consolidated revenue growth to 13% exceeding the growth rates recorded over the past two years. In addition, earnings per share grew by over 50% in 2011 due to the higher operating profit at both DIRECTV U.S. and Latin America, as well as our share repurchase program."

White concluded, "We exit 2011 on track to achieve the operating and financial priorities we outlined a year ago as part of our diversified growth strategy designed to further extend DIRECTV's leadership position as the world's most popular pay television service while maintaining industry-leading revenue and earnings growth. We believe that successful execution of these strategies along with our share repurchase plan — highlighted by the approval of an additional $6 billion buyback authorization — will create significant shareholder value as we remain on track to achieve or exceed our $5 EPS target in 2013."


Q4 2011 - U.S.:

In the quarter, DIRECTV U.S. revenues increased 9% to $6.03 billion due to ARPU growth of 4.9% coupled with the larger subscriber base. Net additions of 125,000 were lower due to an 8% decline in gross additions to 1.03 million and an increase in the average monthly churn rate to 1.52%. The ARPU increase to $101.38 was mostly due to higher NFL Sunday Ticket revenues, price increases on programming packages and leased set-top boxes, as well as higher advanced service and premium channel fees, partially offset by increased promotional offers to new and existing customers. DIRECTV U.S. ended the quarter with 19.89 million subscribers, an increase of 3% over the 19.22 million subscribers reported for the year ended December 31, 2010.

Fourth quarter OPBDA was relatively flat at $1.33 billion and OPBDA margin fell to 22.0% primarily due to higher programming costs mostly related to the new NFL Sunday Ticket contract and program supplier rate increases. Also in the quarter, operating profit grew 12% to $965 million and operating profit margin increased to 16.0% as the decline in OPBDA margin was more than offset by lower depreciation and amortization expense related to an increase in the estimated depreciable life of HD set-top boxes from three years to four years in July 2011, lower depreciation expense associated with a reduction in set-top box capital expenditures over the last several years and the completion of amortization for a subscriber-related intangible asset.


Full Year 2011 - U.S.:

In 2011, DIRECTV U.S. revenues increased 8% to $21.87 billion due to ARPU growth of 4.0% on the larger subscriber base. Net additions were relatively unchanged compared with 2010 at 662,000 as a 5% increase in gross additions to an all-time record 4.32 million was offset by a modest increase in the average monthly churn rate to 1.56% on a larger subscriber base. The ARPU increase to $93.27 was mostly due to price increases on programming packages and leased set-top boxes, higher advanced services fees, higher premium channel buy rates and an increase in NFL Sunday Ticket revenues, partially offset by more promotional offers to new and existing customers.

OPBDA in 2011 increased 1% to $5.29 billion and OPBDA margin fell to 24.2% primarily due to higher costs mostly related to program supplier rate increases and the new NFL Sunday Ticket contract. Also in 2011, operating profit grew 13% to $3.70 billion and operating profit margin increased to 16.9% as the decline in OPBDA margin was more than offset by lower depreciation and amortization expense related to an increase in the estimated depreciable life of HD set-top boxes from three years to four years, lower depreciation expense associated with a reduction in set-top box capital expenditures over the last several years and the completion of amortization for a subscriber-related intangible asset.


Conference Call:

A live webcast of DIRECTV's fourth quarter 2011 earnings and outlook call will be available on the company's website at www.directv.com/investor. The webcast will begin at 1:00 p.m. ET, today, February 16, 2012.


Edited by Sixto, 16 February 2012 - 06:58 AM.

DirecTV: Genie, H25, CCK, GenioGo, SWiM-16 & SWiM-8, DECA to Gigabit Switch with FiOS (75/35)
FiOS: Roamio Pro's (2), Roamio Plus, Mini's (4) with Ultimate HD (My Roamio Thoughts)

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#2 OFFLINE   jdh8668

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Posted 16 February 2012 - 07:17 AM

Too bad they're not making any money and have to raise rates.

#3 OFFLINE   Sim-X

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Posted 16 February 2012 - 07:28 AM

You think they could afford to add some new HD channels.

#4 OFFLINE   ChicagoBlue

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Posted 16 February 2012 - 10:08 AM

Too bad they're not making any money and have to raise rates.


I hate it when American companies are profitable. :rolleyes:


You do realize they are announcing 2011 earnings which have nothing to do with their 2012 cost structure. Their programming rates are going up 10% this year, thus they are raising prices to keep their profitability margins in tact so they can do things like launch more HD and all the other complaints people have.

#5 OFFLINE   ChicagoBlue

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Posted 16 February 2012 - 10:10 AM

You think they could afford to add some new HD channels.


They did. 15 of them were launched last year and they are about to add a few more in a couple of weeks according to people in the know on this board.

You realize that bandwidth is the biggest issue at DTV for HD, right? It costs lots of money to expand bandwidth (more satellites, different encoding techniques, etc). So think of it like this, they are raising your rates to keep profitability at a constant level which allows them to fund R&D and those types of things to give you the more HD you were just talking about.

Otherwise, find another provider and please let us know if those providers aren't raising prices every year for the same reason. They all are.

#6 OFFLINE   keith61

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Posted 16 February 2012 - 10:22 AM

As long as it's at least BBCA HD and maybe IFC-HD and TCM-HD, they can charge as they wish.

#7 OFFLINE   Laxguy

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Posted 16 February 2012 - 10:38 AM

As long as it's at least BBCA HD and maybe IFC-HD and TCM-HD, they can charge as they wish.


Hah! :lol:

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#8 OFFLINE   kevinturcotte

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Posted 16 February 2012 - 01:20 PM

They did. 15 of them were launched last year and they are about to add a few more in a couple of weeks according to people in the know on this board.

You realize that bandwidth is the biggest issue at DTV for HD, right? It costs lots of money to expand bandwidth (more satellites, different encoding techniques, etc). So think of it like this, they are raising your rates to keep profitability at a constant level which allows them to fund R&D and those types of things to give you the more HD you were just talking about.

Otherwise, find another provider and please let us know if those providers aren't raising prices every year for the same reason. They all are.


EXACTLY. Just came from cable (Time Warner) and here, they're more expensive than Directv or Dish (Even at Directv and Dish's regular, full prices), and their receivers are JUNK! Plus you have to pay $10 month lease on them compared to Directv's $6 (Even pay $10 for the first one leased, even though it's REQUIRED to get programming). PQ is all right, but Directv's is MUCH better! Not that I particularly LIKE price increases, lol, but at least with Directv (And Dish, from what I've seen), you can at least see where SOME of your money is going.

#9 OFFLINE   harsh

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Posted 16 February 2012 - 01:31 PM

The fact that the ARPU leaped over $100/month mark is likely to cause subscribers to take a serious look at what they're spending.

That the average DIRECTV subscriber is paying $101.38 is pretty scary and really drives home the idea that they're making a whole lot of money on fees for stuff other than programming.

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#10 OFFLINE   harsh

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Posted 16 February 2012 - 01:38 PM

Their programming rates are going up 10% this year, thus they are raising prices to keep their profitability margins in tact so they can do things like launch more HD and all the other complaints people have.

The question remains as to whether they will address these complaints or just execute more stock buy-backs until the next launches.

Given the extensive research that Sixto and his collaborators have done, it surely doesn't seem like a lot of new broad appeal HD programming is in the offing.

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#11 OFFLINE   kevinturcotte

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Posted 16 February 2012 - 01:40 PM

The fact that the ARPU leaped over $100/month mark is likely to cause subscribers to take a serious look at what they're spending.

That the average DIRECTV subscriber is paying $101.38 is pretty scary and really drives home the idea that they're making a whole lot of money on fees for stuff other than programming.


The channels are gonng HAVE to do something. People are NOT going to continue to pay higher and higher fees. I don't care WHAT channels people want, most people are not going to pay too much more than $100 a month for Tv! They'll drop down to absolute basics or go with OTA and/or streaming.

#12 ONLINE   sigma1914

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Posted 16 February 2012 - 01:41 PM

...
Given the extensive research that Sixto and his collaborators have done, it surely doesn't seem like a lot of new broad appeal HD programming is in the offing.


And what "broad appeal" HD is DirecTV lacking and not planning to add?
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#13 ONLINE   sigma1914

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Posted 16 February 2012 - 01:54 PM

The fact that the ARPU leaped over $100/month mark is likely to cause subscribers to take a serious look at what they're spending.

That the average DIRECTV subscriber is paying $101.38 is pretty scary and really drives home the idea that they're making a whole lot of money on fees for stuff other than programming.


What? Programming is a major part of the APRU increase. Did you miss this part:

The ARPU increase to $101.38 was mostly due to higher NFL Sunday Ticket revenues, price increases on programming packages and leased set-top boxes, as well as higher advanced service and premium channel fees, partially offset by increased promotional offers to new and existing customers.


PROGRAMMING.
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#14 OFFLINE   harsh

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Posted 16 February 2012 - 01:55 PM

And what "broad appeal" HD is DirecTV lacking and not planning to add?

We'll have to wait and see. They managed to create a pretty good stir last year with several of the added channels.

I'm guessing that there will be a few HD channels that will show up on 119W this year that will fall into the category of less broad (not to mention that many can't receive them even if they did appeal).

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#15 ONLINE   sigma1914

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Posted 16 February 2012 - 02:03 PM

All that "lacking HD" and they again had positive net addition in US subscribers.
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#16 ONLINE   sigma1914

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Posted 16 February 2012 - 02:07 PM

We'll have to wait and see. They managed to create a pretty good stir last year with several of the added channels.

I'm guessing that there will be a few HD channels that will show up on 119W this year that will fall into the category of less broad (not to mention that many can't receive them even if they did appeal).


I'm guessing, based on those much closer to the situation rather than the resident DirecTV naysayer and Dish sub, that more basic HD is coming and it won't be on the predominately Latin 119 satellite.
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#17 OFFLINE   harsh

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Posted 16 February 2012 - 02:10 PM

PROGRAMMING.

You shouldn't include higher equipment lease and advanced services (DVR, WHDS) revenues under the heading of "programming". NFLST applies to somewhere downside of 10% of the subscriber base.

There is a question as to whether the ARPU is before or after promotional discounts. Many of those who have subscribed recently get two years (less in the second year) of pretty substantial discounts on their base programming along with free HD and a short run of free premium programming.

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#18 OFFLINE   harsh

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Posted 16 February 2012 - 02:17 PM

I'm guessing, based on those much closer to the situation rather than the resident DirecTV naysayer and Dish sub, that more basic HD is coming and it won't be on the predominately Latin 119 satellite.

Can you offer which satellite said programming might be bounced off of? The physics of satellite TV broadcasting is largely independent of what TV provider you subscribe to.

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#19 ONLINE   sigma1914

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Posted 16 February 2012 - 02:20 PM

You shouldn't include higher equipment lease and advanced services (DVR, WHDS) revenues under the heading of "programming". NFLST applies to somewhere downside of 10% of the subscriber base.

There is a question as to whether the ARPU is before or after promotional discounts. Many of those who have subscribed recently get two years (less in the second year) of pretty substantial discounts on their base programming along with free HD and a short run of free premium programming.


I quoted the whole sentence, but programming was a major player in the higher APRU. Why do you ignore that fact?

It should also be noted your $100+ APRU is only for the 4th quarter, which is when the NFL, NHL, & NBA are going strong...again, PROGRAMMING. The APRU for the year was still below $100.
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#20 ONLINE   sigma1914

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Posted 16 February 2012 - 02:25 PM

Can you offer which satellite said programming might be bounced off of? The physics of satellite TV broadcasting is largely independent of what TV provider you subscribe to.


Let's use common sense. Considering a large amount of subs have a 3 LNB dish, why would DirecTV add national HD to it?
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