Why DIRECTV US Saw Marginal Revenue Growth in 3Q15



Revenue of DIRECTV US in 3Q15

In the last part of the series, we learned about the operations of AT&T’s (T) DIRECTV Latin American operations in 3Q15. John Stephens, the telecom company’s chief financial officer, spoke about this at the Morgan Stanley European TMT Conference held on November 12, 2015. In this part, we will look at some performance indicators of DIRECTV US in 3Q15.

Revenue for DIRECTV US grew by ~3.3% YoY (year-over-year) to reach $6.7 billion in 3Q15. This revenue growth came from both subscribers and their unit revenue during the quarter.

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Customer centric metrics of DIRECTV US in 3Q15

The ARPU (average revenue per user) of DIRECTV US rose ~2.9% YoY to ~$110.4 in 3Q15. According to the company, the YoY growth in ARPU was dampened by one less week of NFL games in 3Q15 compared to 3Q14.

Meanwhile, DIRECTV’s US subscriber growth was ~0.4% YoY during the quarter. The company attributed this customer growth largely to the solid sales in AT&T’s retail stores. The company reported that the customer churn of DIRECTV US rose YoY during the quarter.

Instead of getting direct exposure to AT&T’s stock, you can consider diversified exposure to the company by investing in the SPDR S&P 500 ETF (SPY).

The ETF had ~1.2% of its holdings in the telecom company at the end of September 2015. On the same date, the ETF also held a total of ~2.2% in Verizon (VZ), Comcast (CMCSA), and Time Warner Cable (TWC).


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