Stock Preacher

DIRECTV Group Inc. (NASDAQ: DTV)

The DIRECTV Group Inc. (DTV) is a provider of digital television entertainment in the United States and Latin America. The Company operates in two segments, DIRECTV U.S. and DIRECTV Latin America (DTVLA), which are engaged in acquiring, promoting, selling and/or distributing digital entertainment programming through satellite to residential and commercial subscribers. In July 2008, the Company acquired 180 Connect Inc., pursuant to which it became a wholly owned subsidiary of the Company. In a related transaction, UniTek USA, LLC acquired 180 Connect’s cable services operating unit and certain DIRECTV installation services from DIRECTV, in exchange for UniTek’s satellite installation services in New York, and Burbank and Bloomington in California.

As of December 31, 2008, Liberty Media Corporation owned approximately 53.6% interest in the Company. As of June 30, 2009, the segment had approximately 18.3 million subscribers with access to channels of digital-quality video pictures and CD-quality audio programming. It distributes approximately 2,000 digital video and audio channels, including basic entertainment and music channels, premium movie channels, regional and specialty sports networks, Spanish and other foreign language special interest channels, pay-per-view movie and event choices, and national high-definition television channels. This segment also provides premium professional and collegiate sports programming, such as the NFL SUNDAY TICKET package, which allows subscribers to view the NFL games. The DIRECTV Latin America segment provides DTH digital television services in Latin America and the Caribbean, including Puerto Rico. As of June 30, 2009, PanAmericana and Sky Brazil had approximately 4.17 million subscribers and Sky Mexico had approximately 1.79 million subscribers. The DIRECTV Group, Inc. has a strategic partnership agreement with Qwest Communications International Inc. to offer DIRECTV services to residential customers.

The company was founded in 1977 and is based in El Segundo, California.

Source:https://trading.scottrade.com/quotesresearch/ScottradeResearch.aspx?symbol=DTV,  http://www.reuters.com/finance/stocks/incomeStatement?stmtType=INC&perType=INT&symbol=DTV.O http://investor.directv.com/

Financial Summary

DTV’s second-quarter revenues of $5.22 billion increased 9% over the same period last year principally due to strong subscriber growth at DIRECTV U.S. and DIRECTV Latin America. Operating profit before depreciation and amortization increased 2% to $1.38 billion primarily due to the gross profit associated with the higher revenues partially offset by higher acquisition costs related to the increase in gross subscriber additions, higher subscriber services costs associated with service quality improvement initiatives, and increased upgrade and retention costs at DIRECTV U.S.

Also impacting the comparison was higher general and administrative expenses primarily due to $48 million in currency-related transaction charges in Venezuela at DIRECTV Latin America, as well as a $14 million charge in 2008 for costs associated with the transition of services from a DIRECTV U.S. home service provider that ceased operations. DVT’s operating profit declined 12% to $702 million as the higher OPBDA was more than offset by an increase in depreciation and amortization principally due to capitalization of customer equipment under the DIRECTV U.S. and DIRECTV Latin America lease programs.

Net income attributable to DTV declined 11% compared with the second quarter of last year primarily due to the lower operating profit and increased net interest expense due to higher average net debt balances, partially offset by a decline in tax expense principally resulting from lower earnings before tax, as well as a $38 million gain associated with the revaluation of U.S. dollar denominated monetary net-liabilities held by Sky Brazil. This revaluation is a result of the second-quarter change in the functional currency of Sky Brazil and is reported in “Other, net” on the Consolidated Statements of Operations. Earnings per share were unchanged at $0.40 as the lower net income was offset by a 12% reduction in average shares outstanding resulting from share repurchases made over the last year.

Cash flow before interest and taxes grew 9% to $785 million and free cash flow³ increased 47% to $550 million compared to the second quarter 2008 primarily due to the higher OPBDA, $69 million in dividend payments received, primarily from Sky Mexico, and lower working capital requirements. Free cash flow was also favorably impacted by lower income taxes paid, primarily due to the timing of lower pre-tax earnings, partially offset by higher net interest payments due to an increase in average net debt balances. The quarter also included cash paid for share repurchases of $324 million.

DTV’s first half revenues of $10.12 billion increased 8% over the first six months of 2008 principally due to strong subscriber growth at DIRECTV U.S. and DIRECTV Latin America. Operating profit before depreciation and amortization declined 3% to $2.47 billion primarily due to higher acquisition costs related to the increase in gross subscriber additions, higher subscriber services costs associated with service quality improvement initiatives, and increased upgrade and retention costs at DIRECTV U.S. Also impacting the comparison was higher general and administrative expenses at DIRECTV Latin America primarily due to $120 million in currency-related transaction charges in Venezuela. Operating profit declined 23% to $1.13 billion due to the lower OPBDA as well as higher depreciation and amortization principally due to capitalization of customer equipment under the DIRECTV U.S. and DIRECTV Latin American lease programs.

Net income attributable to DTV and earnings per share declined 26% and 17%, respectively, compared with the first half of 2008 primarily due to the lower operating profit and increased net interest expense due to higher average net debt balances, partially offset by a decline in tax expense principally resulting from lower earnings before tax, as well as a $38 million gain associated with the revaluation of U.S. dollar denominated monetary net-liabilities held by Sky Brazil. Earnings per share were also impacted by a 12% decline in the average shares outstanding resulting from share repurchases made over the last year.

Cash flow before interest and taxes increased 1% to $1.35 billion and free cash flow increased 10% to $1.01 billion compared to the first six months of 2008 as the decline in OPBDA was more than offset by $69 million in dividend payments received, primarily from Sky Mexico, and lower working capital requirements. Free cash flow was also favorably impacted by lower income taxes paid, primarily due to the timing of lower pre-tax earnings, partially offset by higher net interest paid due to higher average net debt balances. The six-month period for 2009 also included cash paid for share repurchases of $670 million.

DTV owns approximately 74% of Sky Brazil, 41% of Sky Mexico and 100% of PanAmericana, which covers most of the remaining countries in the region. Sky Mexico, whose results are accounted for as an equity method investment and therefore are not consolidated by DIRECTV Latin America (DTVLA), had approximately 1.79 million subscribers as of June 30, 2009, bringing the total subscribers in the region to 5.96 million.

Source: http://www.nasdaq.com/aspx/company=repros-therapeutics-inc-reports-second-quarter-2009-financial-results-and-provides-update

Analyst Consensus

This is the consensus forecast amongst 16 polled investment analysts. Against the DIRECTV Group Inc company.

Source: Financial Times.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=DTV.O

Investment Highlights

DTV last week announced that Liberty Media Corporation has received a private letter ruling from the Internal Revenue Service relating to the tax treatment of various aspects of the split-off of Liberty Entertainment Inc. (”LEI”), a wholly owned subsidiary of Liberty Media, from Liberty Media (the Split-Off). As a result of the Split-Off and the subsequent business combination of LEI with DTV (the DTV Business Combination), DTV and LEI would become wholly owned subsidiaries of a new public company, named “DIRECTV.” The Class A Common Stock of DIRECTV is expected to be listed on the NASDAQ Global Select Market under DIRECTV Group’s current ticker symbol, “DTV.”

The receipt of the private letter ruling is one of the conditions to the completion of the Split-Off and the DTV Business Combination, and eliminates a potential termination right in favor of Liberty Media that previously existed under the merger agreement. The private letter ruling provides, among other things, that:

• the Split-Off will qualify as a tax-free transaction under sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended;
• no gain or loss will be recognized by Liberty Media upon the distribution of LEI common stock; and
• no gain or loss will be recognized by, and no amount will be included in the income of, holders of Liberty Entertainment common stock upon the exchange of shares of Liberty Entertainment common stock for shares of LEI common stock (except with respect to cash received in lieu of fractional shares).

DTV announced last month that its subsidiaries, DIRECTV Holdings LLC and DIRECTV Financing Co. Inc., have completed their previously announced $2.0 billion debt financing. This financing consists of $1.0 billion in 4-3/4% senior notes due 2014 and $1.0 billion in 5-7/8% senior notes due 2019. The net proceeds of this financing are available for general corporate purposes and for the repurchase of their existing 8-3/8% Senior Notes due 2013 pursuant to a tender offer announced by the Company on September 14, 2009. The senior notes were sold pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended, and have not been registered in the United States under the Securities Act or in any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Underscoring its status as a playmaker in the world of sports programming, DIRECTV also announced it will ffer more exclusive soccer matches than any other provider as it kicks off its unprecedented coverage of more than 300 marquee European soccer matches from the 2009-2010 UEFA Champions League, UEFA Europa League and the Spanish first division, known as “La Liga.” DTV will bring soccer fans games that had not been previously available on any service, including up to 22 matches a week, every UEFA Champions League playoff and group stage match, every UEFA Europa League knock-out stage match including the final and at least three La Liga games every round of play – only on DIRECTV. And for the first time, soccer will have its own Mix Channel, featuring multiple matches on one screen, the same innovative mosaic technology DIRECTV employs with its exclusive NFL SUNDAY TICKET(TM) package and other sports services. DIRECTV joins Fox Sports en Español, FSN, Fox Soccer Channel and Setanta Sports for UEFA Champions League coverage and GolTV for UEFA Europa League.

Source: Scottrade.com, Reuters.com, http://investor.directv.com/

Technical Analysis

Source: www.stockcharts.com

Moving Average Price Compare

No current signals.

Bollinger Bands

DTV is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

MACD

The MACD for DTV currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

Comparative Analysis

Source: Reuter.com, Nasdaq.com

Insider Trading Activity

Net Share Purchase Activity

Report Disclaimer

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

Popularity: unranked [?]