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EchoStar Q2 Revenue Climbs 18%

8/09/2005 09:59:00 AM Eastern

Englewood, Colo. — Satellite TV provider EchoStar Communications hiked total revenue 18 percent during the second quarter, coming in at $2.1 billion, up from a year-ago $1.8 billion.

Net income for the three months, ended June 30, jumped to $855.5 million, compared with $85.3 million in the same quarter last year. This year’s net income, however, includes a non-recurring, non-cash tax benefit of about $593 million related to previously reported tax losses.

EchoStar reported its Dish network added about 225,000 net new subscribers in the second quarter, down 33.8 percent from the 340,000 added in the same period in 2004. The decrease was attributed primarily to the result of subscriber churn on a continuously increasing subscriber base and the decrease in gross new subscriber additions due to a decline in sales under the company’s co-branding agreement with SBC, which was partially offset by an increase in sales through other distribution relationships and an increase in its distribution channels.

Monthly churn percentage in the second quarter dipped 1.2 percent, down to 1.69 percent from a year-earlier 1.71 percent.

EchoStar finished the second quarter with about 11.5 million Dish subscribers, a 13.1 percent increase over the 10.1 million on board as of June 30, 2004.

Dish network subscriber-related revenue rose 19.8 percent in the first quarter, hitting nearly $2 billion, up from $1.7 billion in the second quarter of the prior year. This increase was due to continued subscriber growth and an increase in monthly average revenue per subscriber, which increased 5.2 percent in the period, reaching $58.46, compared with a year-on-year $55.59. The monthly rise was due primarily to price increases and higher equipment rental fees.

Subscriber-related expenses for the first quarter increased 12.1 percent, hitting $1 billion, compared with $900.8 million in the second quarter of 2004, due primarily to the increase in Dish subscribers, which resulted in increased expenses to support the network.

For the six months, total EchoStar revenue reached $4.1 billion, up from $3.4 billion in the first half of last year. Net income for the first half climbed to $1.2 billion, from $42.4 million, again primarily due to the one-time income tax benefit.