On Nov. 8, satellite TV service provider DIRECTV Group (NYSE:DTV) released Q3 2006 earnings for the period ended Sept. 30.

  • DIRECTV U.S. added 750,000 net subscribers over the past 12 months, and the total customer count now stands at 15.7 million. That 4.5% subscriber growth translated into a beefy 13% total sales boost, and GAAP earnings went on an absolute tear.
  • The dramatic improvement in operational efficiency came from tight cost control, and more specifically, $455 million of customer acquisition costs compared with $708 million last year. Keeping costs fixed while growing revenues is a great recipe for profits.
  • The company prefers to fuel its business with pure cash and has not taken on any new debt in the past year.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$3,610

$3,667.0

$3,233.2

13.4%

Net Profit

--

$370.2

$94.6

291.3%

EPS

$0.27

$0.30

$0.07

328.6%

Diluted Shares

--

1227.9

1395.5

(12.0%)



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

48.54%

49.80%

(1.26)

Operating Margin

17.13%

4.84%

12.29

Net Margin

10.10%

2.93%

7.17

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$2,272.1

$4,225.2

(46.2%)

Accounts Rec.

$1,155.5

$889.2

29.9%

Inventory

$167.6

$237.0

(29.3%)



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable + Accrued Exp.

$2,457.1

$2,298.8

6.9%

Long-Term Debt

$3,397.5

$3,408.2

(0.3%)



Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2006

Q3 2005

Change

Cash From Ops.

$874.5

$373.4

134.2%

Capital Expenditures

$554.8

$182.8

203.5%

Free Cash Flow

$319.7

$190.6

67.7%



Find out why Fools always follow the money.

Related Companies:

  • EchoStar Communications (NYSE:DISH)
  • Comcast (NASDAQ:CMCSA)
  • Time Warner (NYSE:TWX)
  • TiVo (NASDAQ:TIVO)

Related Foolishness:

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here.