PAS and DirecTV get Q3 boost
Hughes has reported better than expected results for Q3. Showing a net addition of 425,000 DirecTV subscribers – as opposed to a projected 235,000 – and a one-time downward adjustment of 143,000 to account for customers who are no longer active, they have been attributed to improved customer service, lower churn rates, attractive promotional offers and maintained close relationships with retailers.
Robert Peck of investment bankers Bear Sterns says he has revised his DirecTV expectations for 2001 upward from 1.045 million to 1.245 million net additions. In a research note, he also added: “we believe the company is on track to meet this estimate and may even surpass it, as it gains further benefits from its new initiatives”. At the end of September, DirecTV had about 10.3 million DBS customers when including this one-time adjustment.
DirecTV Latin America (DLA) has also reported a solid Q3, with 66,000 net additions and $201 million (E225.4 million) in revenue surpassing previous estimates of 60,000 and $180 million respectively. According to Peck, the higher than expected figures are proof that DLA has been working hard over the last few months to reduce churn rates in the region. It now plans to continue its focus on lowering churn – from a current 2.6 per cent to 2 per cent by the end of the year – by attracting higher quality subscribers. All told, DLA now has around 1.5 million subscribers, as opposed to 1.14 million in Q3/2000.
Hughes’ PanAmSat (PAS) division has meanwhile reported revenues of $253 million for Q3, again considerably more than previous estimates of $206 million. The higher than expected figures were attributed to a major $45.5 million contract on its PAS-10 Indian Ocean satellite that the company signed during the quarter and resulted in the company reporting an EBITDA of $166 million and margins of 68 per cent. It is expected that PAS’s 2001 revenue will be up to $868 million, helped by increased transponder demand following the events of September 11 and current Afghanistan campaign.