Whoops! DirecTV’s Growth in Brazil Was Artificially Inflated

by Christopher Freeburn | June 27, 2013 11:22 am

Whoops! DirecTV’s Growth in Brazil Was Artificially Inflated

Directv dish 630 300x168 Whoops! DirecTVs Growth in Brazil Was Artificially Inflated[1]Higher-than-expected numbers of Latin American subscribers helped boost DirecTV‘s (DTV[2]) first-quarter profits past analysts’ forecasts last month[3].

Now the company says it didn’t actually have as many of those subscribers as it first reported. DirecTV concedes that attrition of its Sky Brasil subscriptions was reduced by the improper crediting of subscriber accounts. The practice led the company to report 200,000 more subscribers than it actually had, Reuters notes.

DirecTV holds a 93% stake in Sky Brasil, which reported 5.3 million subscribers at the end of March.

The company indicated that it would eliminate all accounts that had been improperly identified as active by the end of this month. It will take a $25 million pre-tax charge in the second quarter due to the account changes.

Shares of DirecTV fell almost 1% in Thursday morning trading.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/08/Directv_dish_630.jpg
  2. DTV: http://studio-5.financialcontent.com/investplace/quote?Symbol=DTV
  3. past analysts’ forecasts last month: http://www.reuters.com/article/2013/06/27/us-directv-investigation-idUSBRE95Q0G020130627

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