updated 5/4/2006 2:08:19 PM ET 2006-05-04T18:08:19

DirecTV Group Inc., the nation’s largest satellite TV company, returned to a profit in the first quarter as stricter credit policies led to higher earnings per subscriber.

The company, based in El Segundo, said Thursday it earned $235.2 million, or 17 cents per share, for the three months ended March 31, compared to a loss of $41.4 million, or 3 cents per share, a year earlier. Revenue grew 8 percent to $3.39 billion from $3.15 billion.

The company’s domestic pay TV service added 919,000 subscribers during the quarter, a drop of 19 percent from the same period last year. But after accounting for subscribers who later dropped their service, an industry measure called “churn,” the service added 255,000 net subscribers.

The total number of DirecTV subscribers increased 7 percent in the quarter to 15.39 million.

“Similar to recent quarters, this solid growth was driven by our large and growing subscriber base, strong ARPU (average revenue per subscriber) growth and higher operating margins due mostly to the significant scale and operating leverage of our business,” Chief Executive Chase Carey said in a statement.

Analysts expected DirecTV to post a profit of 10 cents per share, according to Thomson Financial.

Looking ahead, the company said the launch next year of two additional satellites that will make its high definition TV signal available to three quarters of all U.S. households will drive future growth.

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