Hughes Electronics posts lower operating earnings
Wednesday, January 20, 1999
08:14 PM
LOS ANGELES, Jan 20 (Reuters) - Hughes Electronics Corp. on Wednesday
reported sharply lower fourth-quarter earnings as losses abroad offset
higher sales, spurred by record U.S. subscribers to its DirecTV
satellite television system.
El Segundo, Calif.-based Hughes said fourth-quarter profits, excluding
one-time items, fell to $13.2 million, or 3 cents a share, from $27.8
million, or 7 cents, in the year-ago quarter.
Revenues rose 5.7 percent to $1.79 billion from $1.69 billion a year
ago, helped by record numbers of U.S. subscribers for DirecTV and higher
sales of commercial satellites.
Hughes attributed the weaker earnings to losses at Hughes Network
Systems' international wireless telephone business and higher start-up
costs for the first full year of operation of its 32 percent-owned
DirecTV Japan.
The company also cited higher operating losses at DirecTV in Latin
America and higher operating costs related to the expansion of the
PanAmSat satellite fleet.
Including one-time items, Hughes' net income rose to $128.2 million, or
32 cents a share, compared with pro forma earnings of $70 million, or 18
cents a share, in the year-ago quarter.
During the quarter Hughes recorded gains of $115 million, or 29 cents a
share, from a favorable tax settlement, $62.8 million, or 16 cents a
share, from the sales of Hughes-Avicom and $20.6 million, or 5 cents a
share, from PanAmSat's early retirement of debt.
For the full year, Hughes sales rose to $5.9 billion from $5.1 billion
in 1997, with DirecTV generating the majority of the increase.
Earnings for 1998, excluding one-time items, increased to $165.9
million, or 41 cents a share, vs. pro forma earnings of $110.2 million,
or 28 cents a share, for all of 1997.
After one-time items, 1998 net income fell to $271.7 million, or 68
cents a share, vs. $470.7 million, or $1.18 a share on a pro forma
basis, in 1997.
"Our revenues increased 16.3 percent for 1998," Chief Executive Michael
Smith said in a statement. "And, excluding one-time items, earnings
increased 50.5 percent."
Smith said the U.S. DirecTV business enjoyed its best year ever for
subscriber growth with full-year sales reaching $1.8 billion, up from
$1.27 billion, as it added 1.15 million net new subscribers in the
United States. (Nyse:GMH)
Quote for referenced ticker symbols: GMH
© 1999, Reuters
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