By Liana B. Baker
Nov 5 (Reuters) - Satellite TV provider DirecTV added more customers in the United States than expected in thethird quarter, showing strong subscriber growth in contrast toits cable rivals, which lost video subscribers in the sameperiod.
Analysts said DirecTV may have seen a one-time gain insubscribers from Time Warner Cable, which grappled witha month long blackout over the summer of CBS Corp, theNo. 1 broadcast network.
"Against a backdrop of a series of programming blackoutsacross cableland, most notably between Time Warner Cable andCBS, DirecTV gained share in the U.S.," said Craig Moffett, ananalyst at MoffettNathanson research firm.
DirecTV added 139,000 net subscribers in the United Statesin the quarter, nearly double the gain of 70,000 that analystsexpected, according to research firm StreetAccount.
In contrast, Time Warner Cable said last week that it hadlost more than 300,000 video subscribers, while Comcast Corp said it had lost 129,000. Another cable company,Charter Communications Inc, reported a net videosubscriber loss of 27,000 on Tuesday.
Time Warner Cable blamed the blackout on CBS for some of its subscriber losses in video.
DirecTV, meanwhile, kept subscribers on board, as churn, orthe rate of cancellations, improved to 1.61 percent from 1.74percent a year earlier.
"DirecTV didn't give customers any reason to cancel in termsof blackouts or anything like that," said Brean Capital analystTodd Mitchell.
ISI analyst Vijay Jayant said the low churn could beattributed to the company's exclusive National Football LeagueSunday Ticket package, which lets DirecTV customers watchout-of-market games every Sunday. Promotion for that productramped up in the third quarter.
In Latin America, DirecTV added 260,000 subscribers, whileStreetAccount was looking for 371,900. While its revenue inLatin America increased 5 percent to $1.66 billion, it saw a 12percent decline in the money it makes off each subscriber. Itblamed that decrease on the devaluation of currency in Venezuelaand "unfavorable changes" in foreign exchange rates in Braziland Argentina.
The weaker-than-expected performance in Latin America forthe second consecutive quarter was flagged by analysts who havelong viewed South America as having the biggest growth prospectsfor the satellite operator.
Even though DirecTV is the largest U.S. satellite providerwith more than 20 million subscribers, investors tend to zero inon the subscriber trends in Latin America, where the company hasuntil now enjoyed rapid growth by tapping into an expandingmiddle class, particularly in Brazil. It also operates inColombia, Argentina, Venezuela, Chile and Ecuador.
"Growth expectations for Latin America are likely to comedown," Moffett said.
Net income attributable to DirecTV was $699 million, or$1.28 per share, compared with $565 million, or 90 cents share,a year earlier.
Excluding a fee settlement and other special items, earningscame to $1.13 per share, which beat the analysts' averageestimate by 12 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 6 percent to $7.88 billion, narrowly exceedinganalysts' estimates of $7.84 billion.
DirecTV shares were nearly flat, down 0.1 percent at $64.24per share.
- Time Warner Cable