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Hughes Q2 DirecTV Sales Soar

7/16/2003 11:01:00 AM Eastern

El Segundo, Calif. - Continued strong subscriber growth and higher average revenue per subscriber were the primary reasons for a 16.2 percent increase in second quarter revenue at DirecTV U.S., the satellite TV service segment of Hughes Electronics' direct-to-home broadcast division.

DirecTV sales for the second three months, ended June 30, hit $1.8 billion, up from $1.5 billion in the same period last year.

Second quarter operating profit, before depreciation and amortization, at DirecTV, more than doubled, to a record $324.8 million, compared with $156.6 million in the year-ago three months. The increase was due to the additional gross profit gained from DirecTV U.S. increased revenue, an improved mix of higher-margin revenues and favorable impact from continued cost control, said Hughes.

Six-month revenue for DirecTV reached $3.5 billion, up from $3 billion in the first half of 2002. Operating profit in the first half, before depreciation and amortization, hit $555.2 million, compared with $250.3 million in the same timeframe the previous year.

The Hughes direct-to-home broadcast segment revenue in the second quarter climbed 9.4 percent, to $1.9 billion, from $1.8 billion in the year-ago period. The segment had operating profit, before depreciation and amortization, of $299.4 million in the second three months, compared with $60.5 million in the same quarter a year ago.

'The continued strong performance of our DirecTV U.S. business, drove Hughes' revenues and operating profit before depreciation and amortization growth in the quarter,' said Jack A. Shaw, president/CEO. DirecTV notched 181,000 net subscriber additions in the quarter and a $2.80 increase in average monthly revenue per subscriber, to nearly $61, said the company.

Due to strong quarterly results, Hughes is increasing DirecTV full-year guidance. The company expects revenue of about $1.9 billion in the third quarter, and full-year revenue of about $7.5 billion, revised from $7.3 billion.

Operating profit, before depreciation and amortization, for DirecTV, is anticipated at between $225 million and $250 million in the third quarter. For the year, this should reach about $1 billion, revised upward from about $900 million. The company expects net subscriber additions of about 900,000 for 2003, revised from 800,000 to 850,000.

Consolidated Hughes revenue climbed 8.1 percent, hitting $2.4 billion in the second quarter, up from $2.2 billion year-on-year.

The digital TV entertainment, broadband satellite networks and global video and data broadcasting company reported operating profit, before depreciation and amortization, of $404.7 million in the second three months, compared with $151.6 million in the same quarter in 2002.

Hughes moved into the black in the second quarter, recording net income of $21.6 million, compared with a net loss of $155.1 million in the same timeframe last year. This was due, in part, to an increase in operating profit driven by DirecTV U.S.

Hughes revenue for the first half rose 9 percent, to $4.6 billion, up from $4.2 billion in the same six months last year. The company reduced its net loss for the six months, to $29.3 million, compared with a net loss of $992.8 million year over year.

Third quarter Hughes revenue is predicted at about $2.5 billion. For the full year, revenue guidance has been revised to between $9.7 billion and $9.8 billion, up from between $9.5 billion and $9.6 billion.

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