DirecTV’s profit less than expected
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.
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.
Shares of DirectTV fell 63 cents to $23.75.
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