Second opinion:
from Dow Theory Forecasts
DIRECTV (DTV) said December-quarter earnings per share slipped 1% to $1.53, exceeding the consensus by $0.25. Year-ago results benefited from a lower tax rate and DIRECTV divesting a portion of its stake in the Game Show Network.
Sales advanced 7% to $8.59 billion, with the U.S. business growing 6%, versus 10% for Latin America. Within the U.S., net subscriber additions slipped 10% to 93,000, while average revenue per subscriber rose 6% to more than $111 per month. Shares rallied on the results.
The U.S. Senate Judiciary Committee plans to examine Comcast’s (CMCSa) proposed $45 billion acquisition of Time Warner Cable (TWC) at a hearing March 26. DirecTV CEO Michael White said the Comcast deal would create “unprecedented media concentration in one company.”
The leverage that Comcast would gain to combat programming costs would not necessarily improve the negotiating power for other pay-TV companies, said White. He added that DIRECTV will consider a variety of strategic options, which could possibly include bundling its TV product with Google’s (GOOG) nascent Internet service.
DIRECTV is a Focus List Buy and Long-Term Buy.
Richard J. Moroney, CFA, Dow Theory Forecasts, www.dowtheory.com, 800-233-5922, March 3, 2014