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DirecTV’s profit less than expected

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From Times Wire Services

DirecTV Group Inc. said first-quarter profit rose less than analysts estimated on costs to upgrade subscribers to high-definition programs.

Net income rose 43% to $336.4 million, or 27 cents a share, from $235.2 million, or 17 cents, a year earlier, the El Segundo-based company said. Sales rose 15% to $3.91 billion, topping analysts’ estimates.

Chief Executive Chase Carey has staked DirecTV’s future on high-definition shows and sports packages, to counter discounts offered by cable TV companies to customers who also buy phone and Internet-access service.

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The quarter showed that Carey’s strategy was succeeding, at a price.

“It’s all about positioning themselves for a bigger high-definition rollout later this year,” said Chris Marangi, an analyst at Gabelli & Co.

The cost of acquiring and installing higher-capacity set-top boxes was about $30 million more than forecast, Marangi said.

The spending helped boost DirecTV’s customer base by about 235,000 subscribers, to 16.2 million.

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Shares of DirectTV fell 63 cents to $23.75.

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