EchoStar Q3 Sales Increase 20%, Adds 320K Subs, But Posts Loss
By Jeff Malester -- TWICE, 12/9/2002
LITTLETON, COLO.— EchoStar Communications, provider of Dish Network satellite television service, posted nearly a 20 percent increase in revenue for the third quarter, reaching $1.2 billion, up from $1 billion in the year-ago period.
EchoStar added about 320,000 net new subscribers during the three months ended Sept. 30. The Dish Network now has about 7.8 million subscribers, an increase of about 21 percent over a 12-month period.
During November, the Dish Network passed the 8 million customer mark.
However, EchoStar, whose proposed acquisition of arch-rival Hughes Electronics and its DirecTV satellite television hookup was rejected earlier by U.S. regulators, posted a net loss of $168 million in the third quarter, down from net income of $3.1 million in the same three months last year.
This loss — due primarily to a $134 million charge related to rights granted Vivendi Universal, when the French media company purchased a 10 percent interest in EchoStar — also includes $40 million of unrealized losses on marketable securities.
In the third quarter, company Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) increased 27 percent, to $197.4 million, compared with the $155.2 million recorded year-on-year. This improvement was partially offset by increased subscriber acquisition costs, due to stronger-than-expected subscriber growth during the quarter.
EBITDA for the third quarter was positively impacted by favorable litigation developments resulting in a non-recurring reduction in the cost of set-top box equipment of about $36 million.
EBITDA, which helps measure cash flow, is preferred by satellite and cable companies as a measure of performance because it excludes capital-intensive expenses and one-time costs pertaining to these types of businesses.
For the nine months, EchoStar revenue climbed to $3.5 billion, up from the $2.9 billion reported in the year-ago period. The company recorded a nine-month net loss of $166.1 million, lowering it somewhat from the $172.6 million net loss registered in the same nine months in 2001. EBITDA for the nine months nearly doubled, hitting $612.5 million, up from $340.1 million year over year.
