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In addition, revenues increased by 13 per cent to $3.23 billion
and operating profit before depreciation and amortisation improved
to $365 million from an operating loss before depreciation and amortisation
of $1.35 billion.
DirecTV president and CEO Chase Carey says, "The more than
doubling of operating profit before depreciation and amortisation
to $338 million in the quarter provides us with another data point
showing the substantial profit-generating potential of DirecTV.
Much of this growth was fueled by the 22 per cent increase in revenues
to $3.05 billion in the quarter along with higher operating margins
attained through improved cost management in key areas such as subscriber
acquisition and upgrade and retention marketing.
"Driven by these accomplishments we generated $230 million
of free cash flow in the quarter compared to a negative $151 million
in last year's third quarter. Another highlight in the quarter was
gross subscriber additions of 1.1 million, demonstrating the continued
consumer demand and strength of our brand and service. This demand
-- which carried over to October when we added our 15 millionth
customer -- is particularly meaningful because we have substantially
improved the credit profiles of new subscribers due to the stricter
credit policy we implemented at the beginning of the second quarter.
In fact, we reduced the number of high-risk customers attained in
the quarter by approximately 50 per cent compared to last year.
"However, DirecTV's average monthly churn rate of 1.89 per
cent in the quarter remained unacceptably high primarily due to
an increase in involuntary churn of high-risk customers attained
in 2004 and early 2005 before the new credit policy was put in place.
As we continue to churn out these subscribers and add new customers
with better credit, we are confident that we will drive churn lower
beginning in the fourth quarter and into 2006. After accounting
for churn, DirecTV added 263,000 net subscribers in the quarter."
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