DirecTV Cuts Loss to $41.4 Million

DirecTV Group Inc., the largest U.S. satellite television service, said Monday that its first-quarter loss narrowed to $41.4 million as it signed up more subscribers than analysts had expected.

The net loss shrank to 3 cents a share from $638.8 million, or 46 cents a share, a year earlier, when the El Segundo-based company recorded $789.1 million in costs for an accounting change and the sale of its PanAmSat unit. Sales rose 26% to $3.15 billion, DirecTV said.

DirecTV ended the first quarter with 505,000 new subscribers for a total of 14.4 million. The increase exceeded the gain of 321,000 customers forecast by analysts surveyed by Bloomberg News. Costs rose 23% in the quarter as the company spent more to attract subscribers and to install features such as digital video recorders.

“Their customer-acquisition engine is still firing on all cylinders,” said Craig Moffett, an analyst at Sanford C. Bernstein & Co., who has a “market perform” rating on DirecTV shares and doesn’t own them.

Shares of DirecTV rose 75 cents to $14.87 on the New York Stock Exchange.

“If the company can start to show more balanced growth, where they are growing not only subscribers but profitability metrics, then the stock could work,” said Aryeh Bourkoff, an analyst with UBS Securities who has a “neutral” rating on the shares and doesn’t own them.

DirecTV’s operating costs rose to $3.2 billion from $2.59 billion a year ago, as expenses to provide service surged 48% to $232.1 million. Average subscriber-acquisition costs increased 1.9% to $656 per customer.

DirecTV, in which Rupert Murdoch’s News Corp. holds a 34% stake, has been trying to lure customers away from cable TV providers and fend off competition from EchoStar Communications Corp., the No. 2 satellite broadcaster, by introducing new programming and discounting the cost of equipment and installation.

In other earnings news:

* Herbalife Ltd. reported a quarterly net profit, reversing a year-earlier loss, on better-than-expected sales of its nutritional supplements and weight-loss aids. Net income for the first quarter was $13.3 million, or 19 cents a share, contrasted with a net loss of $500,000, or a penny a share, a year earlier. Sales increased 15% to $372.1 million.

* Ducommun Inc. said first-quarter profit almost doubled because of stronger military and commercial sales. Net income was $4.1 million, or 40 cents a share, compared with $2.2 million, or 22 cents, a year earlier. Sales at the Carson company rose to $63.8 million from $58.2 million last year.

* Real estate investment trust Macerich Co. said first-quarter funds from operations rose 11% on higher same-center tenant sales and occupancy. Funds from operations -- a standard measure of performance for REITs -- totaled $73.6 million, or 99 cents a share, up from $66.5 million, or 90 cents, a year earlier. Revenue from continuing operations rose 22% to $151.4 million as same-center tenant sales rose 5.8% for the quarter. Macerich, based in Santa Monica, said net income was flat at $18.1 million, or 30 cents a share.