Los Angeles – DirecTV Group Inc., the nation’s largest satellite-TV provider, returned to a profit in the fourth quarter as modest subscriber growth helped lift revenue.
The company, based in El Segundo, Calif., also said it continued efforts to offer high-speed Internet service to customers, including the possibility of working with rival satellite provider EchoStar Communications Inc. of Douglas County on a wireless broadband offering.
DirecTV, which is controlled by Rupert Murdoch’s News Corp., reported net income of $121.2 million, or 9 cents per share, in the quarter ended Dec. 31, compared with a loss in the year-ago period of $288.5 million, or 21 cents per share. Revenue increased 7 percent to $3.6 billion, from $3.36 billion.
Analysts, on average, expected DirecTV to post a profit of 3 cents per share on revenue of $3.59 billion, according to Thomson Financial.
Chief executive Chase Carey acknowledged that subscriber growth had slowed in the fourth quarter as a result of the company’s decision to adopt tougher credit standards to reduce customer turnover, or “churn.”
“If it requires us sacrificing short-term growth or sacrificing long-term growth to make sure we’re adding profitable subscribers, that’s a trade-off we’ll make,” Carey said during a conference call with analysts.
DirecTV added 200,000 net subscribers in the quarter. In 2005, the company’s subscribers grew by 9 percent to 15.13 million.
DirecTV, like EchoStar’s Dish Network, is competing fiercely with cable-TV companies that offer bundled broadband Internet and telephone service to their customers.
Carey said DirecTV is continuing to weigh options, including more aggressively offering DSL Internet service in partnership with local phone companies. It does so in the Denver area via Qwest.
Carey did not confirm reports that DirecTV would soon join EchoStar to build a nationwide wireless Internet network for satellite-TV subscribers but said he was open to the possibility.
“Clearly, if EchoStar was part of something, there are positives in terms of strengthening the distribution side of it. But obviously, if you get more parties, there are issues as well,” Carey said. “We’re certainly open to pursuing things that create value for us, but there are always complexities you have to work through.”
Carey said that if a wireless option were chosen, it could exist alongside existing DSL deals. He also said it would take two or three years to expand a wireless network nationwide, but the company would hope to have major cities covered sooner.
