$4 bln Share Repurchase Helps DirecTV counter VEF Devaluation – DTV, TWC & CMCSA

Boston, MA 02/15/2013 (wallstreetpr) – DirecTV announced its results for the Q4 and F.Y. ending December 2012 forecasting a financial hit on Venezuela currency devaluation. The company plans to buy back about 12% of its market cap (worth $4 billion) in order to counter the problem.

The satellite channel provider announced a subscriber growth in the Latin American region during the 4th quarter and a resulting profit growth of $0.53 a share to $1.55, from $1.02 a share for the Q4, 2011. Quarterly revenues climbed 8.5% over the comparable period of last year.

In the United States, DirecTV (NASDAQ:DTV) added 103,000 net subscribers. In Latin America, the greatest driver of its business, it added 658,000 net subscribers. Analysts were expecting net additions in Latin America of 601,000, according to Street Account.

The company will incur a one off charge of pr tax charge of $160 million this year.

Another positive sign as the decline in rate of subscriber cancellation (churn) in US market to 1.43% against last years 1.52%. About 103,000 subscribers joined the company’s net in that region. The highest addition to subscriber base was in Latin American market where 658,000 net subscribers joined in, eclipsing analysts estimates of 601,000.

Latin America is the strongest market for the company where the subscriber base’ growth beat analysts estimates.

However the Venezuelan currency devaluation can take a toll on its revenues in that region by as much as 3.5%, said Todd Mitchell, a Brean Capital analyst. The company’s future success is highly dependent on its ability to skim the Latin American region.

The magnitude of the share buyback is a “big surprise” Todd says. He estimated the company would go for only as high as $3 billion. This would be the ” highest buyback in the cable and satellite space this year” he said. The buy back is well timed as rivals Time Warner Cable and Comcast Corp (NASDAQ:CMCSA) would offer very low returns to stakeholders this year.

Quarterly net income from DirecTV (NASDAQ:DTV) climbed to $942 million from $718 million a year ago. $8.05 billion  worth of revenues beat analysts estimates of $8.03 billion.

DirecTV (NASDAQ:DTV) also announced in December that it will increase its service fees by 4.5% in February as its programming costs increase.

DirecTV (NASDAQ:DTV) shares declined by 1.53% and currently trading at $49.45. Time Warner Cable Inc (NYSE:TWC) were up by 1.09% and currently trading at $87.18. Comcast Corp (NASDAQ:CMCSA) shares were up 1.88% and currently trading at $41.10.

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Published by Brendan Byrne

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. You may contact Brendan via his email (brendanbyrne@wallstreetpr.com) or his Google+ page (https://plus.google.com/u/0/116608759701551457422).

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