DirecTV became a $24 billion business this week, reporting a phenomenal set of pay TV results, built on a solid US foundation and continued tremendous additions in Latin America.
In total the company claimed 667,000 net new additional subscribers (289,000 in the US and 378,000 in Latin America) in the quarter which amounts to 79% more than the previous year. Faultline has a Rethink-TV report out on Latin America (email me for details [email protected]) which charts the colossal growth in Pay TV in the region in general, but particularly in Brazil and Mexico, two strongholds of DirecTV.
For the entire year DirecTV took advantage of the growing Latin American economic climate, which meant less churn and a huge impact from strong gross additions, to record 1.2 million net new subscribers a rise of 76% over a year earlier, which takes cumulative subscribers to 8.9 million including Sky Mexico (5.8 million without) where it only owns 41% of the stock.
This, plus a stellar performance in the US brought revenues to over $6.6 billion in the quarter and $24 billion for 2010 from a total of 19.2 million US customers plus the 8.9 million in Latin America, totaling over 28 million subs. This number was driven by low churn (1.53% per month) and 4.1 million gross subscriber additions in the US and 2.8 million in Latin America, not counting Sky Mexico. On the back of the results the DirecTV board agreed to a $6 billion stock repurchase program.
“Our fourth quarter results capped off one of DirecTV’s strongest years ever as we further extended our position as the world’s largest provider of pay television services with over 28 million subscribers in the US and Latin America,” said Mike White, president and CEO of DirecTV. In Latin America, our priority will be to continue leading the market in HD and DVR services while introducing exciting new products and services that target the rapidly growing middle market segments.’
This all allowed DirecTV to produce a net income of $2.2 billion for the year, more than double the previous year, and $618 million for the quarter, from a small loss last time. The company still only has $1.5 billion in cash right now, but it is throwing off so much cash, it has to give it away to shareholders, in order to keep it down.
DirecTV issued $6 billion in senior notes during the year and now owes around $10.5 billion, after paying off credit facilities of $2.32 billion and $1.54 billion of debt.
DirecTV’s results will no doubt be compared with its US rival Dish Networks, which is likely to have similar numbers for its operations in Mexico, but can expect far fewer US additions ‘ its results are out tomorrow.