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UPDATE 1-Viacom dispute hurts DirecTV in third quarter

* DirecTV says July dispute with Viacom increased Q3 churn

* No. 1 satellite provider misses EPS estimates by 3 cents

* Company increased revenue per subscriber in Q3

Nov 6 (Reuters) - Satellite TV provider DirecTV saw more U.S. subscribers than expected cancel in the quarter due to a programming dispute with Viacom that blacked out channels such as Nickelodeon and MTV for nine days in July.

The U.S. churn rate, or cancellation rate, in the third quarter increased to 1.74 percent from 1.62 percent a year ago, which the company said was driven by its dispute with Viacom. Analysts expected a churn rate of 1.68, according to Street Account.

DirecTV's 20 million customers lost 26 Viacom networks in July, a programming blackout unprecedented in size, length and scope. The two companies reached a new deal on July 20 that restored the networks back to DirecTV customers.

DirecTV's competitor, Dish Network, said on Tuesday it lost a better-than-expected 19,000 subscribers and reported a quarterly loss due to litigation expenses.

DirecTV said it generated higher average revenue per subscriber in the United States and strong subscriber growth in Latin America, where revenue increased by 8 percent, slightly ahead of estimates.

For the three months ended Sept. 30, DirecTV added 67,000 subscribers. Analysts, on average, looked for 105,000 additions, according to StreetAccount. The latest results followed the company's first-ever quarterly loss of U.S. subscribers, which occurred in the first quarter.

The third quarter usually sees a boost from DirecTV's ``NFL Sunday Ticket'' package, a premium sports deal that lets subscribers watch out-of-market football games on Sundays.

In Latin America, where the company sees much higher growth, it added 543,000 new subscribers, but fell short of analysts' estimates of 575,000 subscribers.

Net income rose to $565 million, or 90 cents per share, from $516 million, or 70 cents per share, a year earlier. DirecTV missed analysts' estimates of 93 cents per share, according to Thomson Reuters I/B/E/S.

DirecTV posted average revenue per subscriber of $96.41 - $2.01 higher than in the second quarter.