Hughes Takes Loss On Q4 11% Revenue Jump

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El Segundo, Calif. - Satellite television provider Hughes Electronics reported a 10.8 percent increase in fourth-quarter revenue, climbing to $2.28 billion, compared with $2.06 billion in the same three months last year.

However, Hughes reported a fourth-quarter net loss of $132.6 million, compared with net income of $1.1 billion in the same three months in 2000. The change was due primarily to the gain on the sale of Hughes' satellite manufacturing businesses in the fourth quarter of 2000, increased net interest expense and lower earnings before interest, taxes, depreciation and amortization (EBITDA).

For the fourth quarter ending Dec. 31, EBITDA was $118.2 million, compared with $153.8 million in the year-ago period, due to losses from Hughes' DirecTV DSL service that provides high-speed Internet access on phone lines.

The major player in the company's revenue increase in the fourth quarter was its Direct-To-Home Broadcast segment - namely its DirecTV system - which increased its proceeds 12.7 percent to $1.71 billion, up from $1.52 billion in the fourth quarter of 2000. The segment had negative EBITDA of $5.3 million, compared with EBITDA of $16.4 million in the year-ago three months.

DirecTV in the United States, alone, reported quarterly revenue of $1.52 billion, up 12 percent from $1.35 billion in the same quarter in 2000. The increase was due primarily to subscriber growth. (See story, p. XXXX.)

For the year, the Direct-To-Home Broadcast segment had total revenue of $6.3 billion, up from $5.2 billion in 2000. The segment reported negative EBITDA of $74.8 million in the 12 months, up from a negative EBITDA of $24.5 million in the same period in 2000.

Hughes is planning to be taken over by EchoStar Communications in a $30 billion stock deal. But the pending merger has raised anti-competitive concerns, and is far from a done deal.

For the full year, Hughes total revenue climbed 13.4 percent to $8.26 billion, up from $7.29 billion in 2000. The company attributed the increase mainly to increased U.S. subscriber growth at DirecTV.

EBITDA for the year was $389.9 million, compared with $594 million the previous 12 months. For 2001, net loss totaled $621.6 million, compared with net income of $813 million in 2000. The change was due primarily to the 2000 sale of satellite manufacturing businesses and lower EBITDA.

Looking ahead, Hughes said revenue in the first quarter of 2002 should range between $1.95 billion and $2 billion, and $9 billion to $9.2 billion for the year. EBITDA for the first quarter of 2002 is expected to range between $100 million and $150 million, while EBITDA for the full year should tally between $750 million and $850 million.

U.S. DirecTV revenue in the first quarter of 2002 should be in the neighborhood of $1.43 billion, said Hughes, with a range of $6 billion to $6.2 billion for the year. U.S. DirecTV EBITDA for the first quarter is expected to range between $80 million and $100 million, and for the year between $525 million and $575 million.

Net subscriber additions at DirecTV in the first quarter of 2002 should range between 200,000 and 250,000. For the year, this should increase to between 1 million and 1.2 million.

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