DirecTV profit rises 10 pct on demand for high-def service

Satellite television company DirecTV said Wednesday its first-quarter earnings rose 10.4 percent, as it acquired more subscribers in the U.S. and Latin America and customers spent more on high-definition and video recording services.

DirecTV Group Inc. also said media mogul John Malone's Liberty Media Corp. had agreed to restrict its voting interest to 48 percent in exchange for DirecTV's decision to increase its share repurchase program to $3 billion, funded by up to $2.5 billion in new debt.

Its shares rose $1, or 3.9 percent, to $26.80 in afternoon trading. They are nearer the high end of their 52-week range of $18.20 to $27.73.

The El Segundo, Calif.-based company said net income climbed to $371 million, or 32 cents per share, in the three months ended March 31 from $336 million, or 27 cents per share, a year ago.

Revenue rose 17 percent to $4.59 billion from $3.91 billion.

Analysts surveyed by Thomson Financial expected a net profit of 31 cents per share on revenue of $4.47 billion.

DirecTV said it added 275,000 net U.S. subscribers, increasing its domestic subscriber base by 5.2 percent to 17.1 million.

Average monthly revenue per subscriber rose 8.6 percent from a year ago to $79.70, driven by price increases for programming, higher fees for HD and DVR equipment and services and better pay-per-view sales.

It added 200,000 net subscribers in Latin America, boosting the subscriber base 24 percent to 3.5 million. Monthly revenue per subscriber rose 20 percent to $53.52, thanks to a weak U.S. currency and growth in Venezuela and Argentina.

In late February, Liberty Media acquired a 41 percent stake in DirecTV by swapping a 16 percent stake in News Corp. plus $625 million in cash.

In April, Liberty increased its stake in the satellite television provider to 48 percent, and analysts had expected Liberty to attempt to buy the whole company.

Following Wednesday's announcement, analysts continued to speculate that an eventual takeover of the company was not far off.

The voting rights cap "allows Liberty more time to decide what it wants to do to structure a better deal," said Goldman Sachs analyst Ingrid Chung in a research note.

Morgan Stanley analyst Benjamin Swinburne said the moves "are likely interim steps that allow DirecTV to continue to buy back its shares while the two companies continue exploring structure rationalization."

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AP Business Writer Jennifer Malloy in New York contributed to this story

(This version CORRECTS debt figure to $2.5 billion)