DirecTV Group Inc., the nation's largest satellite TV operator, reported an 11% drop in second-quarter profit Thursday as higher customer- acquisition costs offset revenue growth.
The El Segundo company said that customers were cutting back on premium channels and pay-per-view programming.
But DirecTV added 224,000 net subscribers in the quarter, 74% more than the same period last year, at a time when cable operators are losing basic video customers.
It was DirecTV's first full quarter of partnership with AT&T Inc. to cross-sell each other's services, which boosted customer rolls.
DirecTV earned $407 million, down from $455 million in the same quarter a year ago.
Earnings per share held steady at 40 cents, below the 43 cents forecast by analysts polled by Thomson Reuters.
Revenue rose 9% to $5.22 billion, beating analysts' average estimate of $5.18 billion.
DirecTV also said that its spin-off from Liberty Media Corp. is on track to be completed within the next couple of months.