DirecTV Hikes Revenue Forecasts on Subscriber Growth

01 October 2003

DirecTV – the latest stateside addition to the Rupert Murdoch empire – is set to consolidate its position as the leading US satellite operator with higher-than-expected growth in both revenues and subscribers.

The satellite firm's present owner Hughes Electronics (a unit of General Motors) has raised the service's full-year forecasts after a blistering third quarter.

Hughes estimates that DirecTV added 320,000 subscribers in Q3 and is now forecasting 1.05 million new customers for 2003 as a whole, up from previous guidance of 900,000. Churn – the rate of subscriber defections – is still minimal at 1.6% per month.

As a result, Q3 revenues are now expected to total $1.93 billion (€1.65bn; £1.16bn) – up from prior predictions of $1.86bn – while full-year turnover is forecast at $7.6bn (up from $7.5bn). Guidance for 2003 operating profits remains static at $475m, despite "significantly higher marketing costs".

All of which is doubtless music to the ears of Murdoch, whose News Corporation is purchasing – subject to regulatory approval – a 34% stake in Hughes for $6.6bn.

DirecTV now has roughly 11.5m subscribers, ahead of second-placed satellite operator EchoStar on 9m. Both, however, still trail far behind leading cable-TV operator Comcast, whose customer base stands at around 21.3m.

Data sourced from: The Washington Post Online; additional content by WARC staff