(Adds details, executive quotes)
NEW YORK, Sept 29 (Reuters) - Hughes Electronics Corp. on Monday raised the revenue and subscriber forecasts for its DirecTV satellite television unit thanks to popular promotions such as its National Football League package.
DirecTV also announced a new marketing campaign with partner TiVo Inc. to promote digital video recorders, despite speculation that the partnership might be in jeopardy.
Satellite TV has been siphoning customers from cable providers, which have been rolling out digital services in a bid to attract viewers.
Hughes, based in El Segundo, California, said DirecTV will add 320,000 subscribers in the third quarter and about 1.05 million for the year, up from its previous view of 900,000.
"Our new subscribers are coming from cable," Roxanne Austin, president of DirecTV, told a news conference in New York.
DirecTV said "churn" -- a measure of how many subscribers cancel their service -- remained low, at about 1.6 percent per month, with a goal to reduce it to 1.5 percent a year.
DirecTV revenue will total about $1.93 billion in the third quarter, compared with an earlier estimate of $1.86 billion, while full-year revenue will reach about $7.6 billion, up from a previous estimate of $7.5 billion, it said.
"They are pretty impressive, the subscriber numbers as well as the ARPU (average revenue per user)," said analyst Tom Eagan of Oppenheimer & Co. "Every quarter the company seems to make inroads in certain operational difficulties that they have faced. This quarter it was about ARPU."
Eagan said DirecTV estimates third-quarter ARPU at $63.64, above the analyst's own estimate of $61.50.
Hughes said operating profit expectations remain in line with its previous guidance of about $475 million, and it stood by its operating profit forecast of about $1 billion before depreciation and amortization, despite "significantly higher marketing costs."
Hughes Electronics's parent, General Motors Corp. , agreed in April to sell its stake in Hughes to Rupert Murdoch's News Corp. for about $6.6 billion in a deal that would give the global media tycoon 34 percent of the satellite provider.
Hughes shares were up 3 cents to $14.29 in afternoon trade on the New York Stock Exchange. News Corp. is paying $14 per share for the GM stake. TiVo shares were up 28 cents at $7.68 on the Nasdaq stock market.
Among the features DirecTV offers is "Sunday Ticket," an exclusive package of weekly NFL games, which has helped lure cable subscribers.
With some 11.5 million subscribers, DirecTV is the leading U.S. satellite service, ahead of EchoStar Communications Corp.'s DISH network and its 9 million customers. By comparison, leading cable provider Comcast Corp. boasts about 21.3 million.
DIRECTV-TIVO MARKETING CAMPAIGN
DirecTV announced a $10 million marketing campaign with TiVo to promote digital video recorders (DVR), which allow users to record TV shows and customize TV viewing. TiVo makes DVR technology.
As part of the promotion, DirecTV plans to cut in half, to $99, the price of a DVR with a built-in DirecTV tuner.
In recent weeks, Wall Street analysts have said News Corp. may in time end the ties between TiVo and DirecTV. A source familiar with the matter said the TiVo-DirecTV contract expires in 2007.
News Corp. may elect to employ its own technology rather than the TiVo system. News Corp.'s British Sky Broadcasting Group already offers a DVR created by News Corp.-controlled NDS Group.
DirecTV's Austin defended the TiVo partnership.
"We have made no changes in our contractual relationship with TiVo," Austin said in an interview.
DirecTV hopes to have 750,000 DVR customers by the end of the year, up from the current 500,000.