LOS ANGELES—DirecTV Group Inc. said Wednesday higher interest payments on its debt sent fourth-quarter earnings down 2 percent, but the satellite TV operator’s revenue jumped 17 percent on strong subscriber growth and the lowest rate of U.S. customer defections in eight years.
The El Segundo, Calif., company earned $348 million in the quarter compared with $356 million a year ago. Per-share income rose to 30 cents from 29 cents because the company had more shares outstanding in the latest period.
Analysts polled by Thomson Financial were looking for profit of 29 cents per share.
Revenue rose 17 percent to $4.88 billion, exceeding Wall Street’s estimate for $4.77 billion.
Revenues were driven mainly by net subscriber growth in U.S. and Latin America and higher average revenues per subscriber, which rose 8.3 percent to $87.40 due to higher prices for programming, high-definition and digital video recorder, and equipment fees.
“We exit 2007 with tremendous operating and financial momentum,” Chase Carey, DirecTV’s president and chief executive, said in a statement.
DirecTV added 474,000 net subscribers during the quarter, including 275,000 in the U.S., closing out the period with a total of 16.8 million subscribers, up 6 percent from 15.9 million at the end of the same quarter in 2006.
The company’s monthly churn rate in the U.S., or the pace of customer defection, fell during the most recent quarter to 1.42 percent, the company said.
Carey attributed the lower churn in the U.S. to a 10 percent increase in the number of subscribers opting for high-definition and digital video recording devices, and tighter credit policies by the company.
“Our focus on advanced products and quality subscribers was again certainly important to our churn reduction. However, equally important were our initiatives to limit risky customers through stricter policies,” Carey said during a conference call with Wall Street analysts.
The company has tightened its credit requirements as part of an initiative to target customers who might be more likely to afford pricier features from the service.
“It’s a trade off we’re more than willing to make,” Carey said.
The executive said he expects average revenue per user to grow at least 5 percent this year, and demand for higher-margin advanced services to increase by at least 10 percent.
DirecTV is currently operated by Rupert Murdoch’s News Corp., which agreed to sell its stake in the company to John Malone’s Englewood, Colo.-based Liberty Media Group last year in exchange for Liberty’s minority stake in News Corp.
Carey said he expects the transaction to close in the next couple of weeks.
The Federal Communications Commission is expected to vote on the proposed acquisition this month.
Some analysts have suggested Liberty Capital might make a tender offer for DirecTV if the deal is approved.
For the full year, DirecTV reported net income of $1.45 billion, or $1.21 per share, compared to $1.42 billion, or $1.13 per share, for 2006.
Full-year revenue rose to $17.2 billion, compared to $14.8 billion in a year earlier.
DirecTV shares rose 95 cents, or almost 4 percent, to close at $24.83.
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AP Business Writer Jeremy Herron in New York contributed to this report.
