DirecTV reported another strong quarter. Overcoming potential headwinds from the economy, the housing recession, and the loss of AT&T marketing in former BellSouth territories, DTV produced an across the board beat in its 1Q08.
EPS of 32 cents and revenues of $4.59 billion beat consensus estimates of 31 cents and $4.47 billion, respectively. EPS grew 18% and revenues grew 17%. EBITDA also came in ahead of expectations.
Both U.S. and Latin America contributed to the upside. US only revenues grew 14% with EBITDA up 22%. Latin America is definitely turning into a significant value generator for DTV shareholders. Revenues rose 47%, EBITDA rose 73%, and 200,000 new subscribers were added. Latin America accounts for over 10% of total DTV EBITDA.
The good financial results were matched by even better subscriber metrics….

….Net subscriber additions of 275,000 easily beat analyst estimates for around 200,000. The upside was driven by greater than expected gross additions and lower than expected churn. Flow through to financial results was boosted by higher than expected ARPU growth. ARPU is getting a boost from DVRs and HD. DTV also did a good job keeping a lid on its retention and subscriber acquisition marketing expenses. SAC was in line with estimates at $712.
On the ownership/capital structure front, DTV announced another $3 billion share repurchase to be financed mostly by debt. Liberty Media has agreed to keep its voting stake at 48% even though its economic ownership will rise above 50% if the buyback is completed. Eventually a merger with Liberty Entertainment and broadening of DTV’s business to programming seems in the cards.