DirecTV’s revenue and operating profit before depreciation and amortization...
DirecTV’s revenue and operating profit before depreciation and amortization weren’t overstated when the DBS company made an error concerning Brazilian subscribers during its 8-K Thursday, it said. The only real financial effect is expected to be the $25 million pretax…
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charge “related to the write-off of capitalized installation costs,” said Wells Fargo analyst Marci Ryvicker. She spoke with DirecTV about the misstatement, she said in a research note. Nearly all of the affected subscribers were from the middle-markets segment, she said. DirecTV stated in its first quarter earnings call “that it is already reviewing its credit policies and retention offers to try and better manage the middle-markets segment,” she said. The disclosure of the irregularities “results in a lower target multiple,” said analyst Craig Moffett of Moffett Research. But “the resultant sell-off in this stock is sufficient for us to upgrade DirecTV,” he said in a research note. Dish Network’s options are being narrowed, he said in reference to Dish pulling out of its bids for Sprint Nextel and Clearwire. “Almost all of the remaining options are better than those that have been removed.” The most attractive option would be a merger attempt with DirecTV, he added.