DirecTV (NASDAQ: DTV) reported first-quarter 2014 results before markets opened Tuesday. The satellite TV provider posted adjusted diluted earnings per share (EPS) of $1.63 on revenues of $7.86 billion. In the same period a year ago, the company reported EPS of $1.20 on revenues of $7.58 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.50 and $7.91 billion in revenues.

DirecTV claims 20.27 million U.S. subscribers at the end of the first quarter, making it the second-largest pay TV operation in the country, behind only Comcast Corp. (NASDAQ: CMCSA). The company’s churn rate in the quarter was 1.45% and although it posted gross subscriber additions of 891,000, the number of net additions rose by just 12,000, down from a net of 21,000 a year ago due, the company said, “to a higher number of subscriber disconnections associated with the larger subscriber base.” So, the more customers DirecTV gets, the more customers the company will lose. That seems like a prescription for success all right.

Revenue per customer rose to just over $100 a month, because DirecTV collected higher fees for its advanced receivers, increased pricing on its programming packages, charged higher warranty fees and increased its advertising sales and business revenues.

In the company’s Latin American division, the net subscriber count grew by 361,000, which was down 38% from growth in the same period a year ago. Average revenue per customer fell by nearly 10% to $48.83, primarily due to currency effects. Including 6.15 million subscribers to Sky Mexico, in which DirecTV holds a 41% stake, the company’s subscriber total in Latin America is now 18.08 million.

The company’s CEO said:

In the U.S., operating profit before depreciation and amortization margin expanded year-over-year for the third consecutive quarter, highlighting our commitment to profitably grow our businesses through significantly improving the customer service experience, disciplined expense management and productivity initiatives. In Latin America, despite challenging macroeconomic headwinds, we continue to profitably expand our share of the growing pay TV market while delivering adjusted OPBDA margin of 30%.

Notice that U.S. operating profit is not growing on the basis of new subscribers. This means that existing subscribers will have to pay more in order to sustain the company’s profits. The corollary to that is that some subscribers will decide they don’t need the service. It is for this reason that DirecTV is exploring a tie-up with AT&T Inc. (NYSE: T).

The company did not offer guidance in its press release, but the consensus estimates call for second quarter EPS of $1.59 on revenues of $8.09 billion. For the full year, EPS is expected to total $5.98 on revenues of $33.34 billion.

Shares were up about 2.7% in Tuesday’s premarket to $82.00, having closed Monday at $79.84. The current 52-week range is $57.05 to $82.75. Thomson Reuters had a consensus analyst price target of around $79.10 before this report.

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