DISH ( $32 pop to $37) Loss Narrows On Growth In Subscriptions
By Anna Wilde Mathews
Staff Reporter of The Wall Street Journal
EchoStar Communications Corp. said its net loss narrowed, as the No. 2 U.S.
satellite-television provider increased its number of customers and brought
in more revenue per subscriber.
EchoStar, Littleton, Colo., reported a first-quarter net loss of $167
million, or 35 cents a share, compared with a $185.1 million loss, or 40
cents a share, in the year-earlier quarter.
EchoStar's revenue increased to $861.9 million from $565.7 million a year
earlier.
The net-loss figure for the recent quarter included a $92 million charge to
account for the reduced value of some investments as a result of
stock-market declines. Without the charge, the company had a loss of $75
million, or 16 cents a share. A First Call/Thomson Financial consensus of
analysts had predicted a 24-cent loss.
At 4 p.m. in Nasdaq Stock Market trading, EchoStar rose $4.63, or 14%, to
$36.93.
On an operating basis, the company said it had a loss of $15.2 million,
compared with $142 million a year earlier. That result doesn't include
interest costs and other expenses not related to the company's operations.
The company's first-quarter cash flow, or earnings before interest, taxes,
depreciation and amortization, a significant peformance measure in this
industry, amounted to $51 million, compared with a loss of $87.6 million
last year.
Echostar attributed its narrowed loss partly to the fast growth in its
subscriber base. The company aggressively promotes its satellite-television
services, essentially offering new customers free equipment in exchange for
signing up for a year of the DISH Network service.
Its marketing costs for the quarter, including subscriber promotion
subsidies and advertising, rose slightly, to $300.2 million from $273.3
million a year earlier.
EchoStar said it had about 5.72 million subscribers at the end of March, a
48% increase from the number a year earlier. The company added about 460,000
new subscribers in the first quarter of 2001.
By contrast, rival Hughes Electronics Corp. recently said it is slowing down
subscriber acquisition efforts for its DirecTV service due to escalating
marketing costs and the current economic slowdown. Hughes said the ailing
economy has prompted it to take a more cautious approach, including reducing
certain investments in Internet-access services. DirecTV is the No. 1
satellite-television provider in the U.S. in terms of subscribers.
EchoStar says it has managed to achieve greater revenue per subscriber than
in the past, partly as a result of price increases and partly because of
increased sales of higher-priced programming packages.
In comments to analysts, EchoStar Chairman and Chief Executive Charlie Ergen
reiterated earlier comments that a combination of his company with Hughes
would be a good strategic fit. EchoStar has been a player in the complicated
game of music chairs among various satellite-television players, courted at
times by both Hughes and News Corp.
Earlier this week, Hughes, its parent General Motors Corp. and News Corp.
started formal negotiations on a proposed spinoff of Hughes and News Corp.
assets into a new global satellite-television concern.
(END) DOW JONES NEWS 05-03-01
08:58 PM
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