DirecTV’s Outlook for 2012 and 2013

Transcript from Seeking Alpha:

Next, I would like to make a few comments on our consolidated outlook. We expect to grow earnings per share to well over $4 this year, on pace to achieve our EPS target of at least $5 in 2013. Before interest and taxes, cash flow is expected to grow in the low double-digit range. However, free cash flow is likely to come in relatively flat compared with 2011, due mostly to our cash taxes, which will be higher in 2012, due to greater earnings and higher cash tax rate of 30% range, primarily related to the reversal of accelerated depreciation and benefits associated with prior year economic stimulus programs.

Finally, regarding our balance sheet, at this time, we still believe there are significant value in DIRECTV’s stock price, which merits our capital allocation strategy for share repurchases. Therefore, as Mike stated earlier, we expect to continue repurchasing shares at a pace of about $100 million per week. We also expect to opportunistically exit the debt markets in the near future. Once we get beyond 2012 with our balance sheet re-leveraging substantially completed, the level of buybacks will be based on a number of considerations, including strategic opportunities, our share price, leverage capacity and further investments in Latin America. If we accomplish all of these targets and deliver the expected financial results, I believe we will continue generating substantial shareholder value by leading the industry in revenue and earnings growth, as well as returning cash to shareholders.

The stock is at $45 which means it’s going for 11 times this year’s earnings and for nine times 2013’s.

Posted by on February 16th, 2012 at 11:54 pm

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.