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DirecTV Provider Hughes Sees 3.7% Sales Gain in Q3

El Segundo, Calif. — Hughes Electronics Corp., which provides digital TV entertainment through DirecTV satellite-broadcast unit, said sales for the third quarter ended Sept. 30 increased 3.7 percent to $1.69 billion, compared to $1.63 billion in the third quarter of 1999.

Hughes, a unit of General Motors Corp., reported a third-quarter loss of $88.5 million, compared to a loss of $29.6 million in the year-ago period. The company was hurt by subscriber growth that was lower than expected.

Third-quarter revenues for Hughes’ Direct-To-Home Broadcast segment climbed nearly 13 percent to $1.29 billion, compared to $1.14 billion in the third quarter of 1999.

DirecTV, which the company said had its best third quarter ever for subscriber growth in the United States, reported quarterly revenues of $1.15 billion in the United States, compared to $1.05 billion in the year-ago quarter. The company added 450,000 net subscribers, compared to 423,000 net subscribers in the third quarter of last year, but the gain was substantially lower then what industry analysts expected.

While gross subscriber additions were up significantly, compared to the third quarter of 1999, net subscriber additions were impacted by DirecTV’s first-ever price increase and the conclusion of the PrimeStar conversion process. About 300,000 customers were converted from the PrimeStar By DirecTV medium-power service.

PrimeStar was acquired by DirecTV in 1999, and since that time, DirecTV has converted about 1.5 million customers to its high-power service. DirecTV shut down the PrimeStar By DirecTV service in September, six months ahead of schedule.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the Direct-To-Home Broadcast segment in the third quarter were $36 million, compared to $86 million in the year-ago quarter. Hughes said the decline was principally due to higher marketing costs, and the impact from the completion of the PrimeStar conversion process.