EchoStar Losses Beat Expectations

01 March 2002

EchoStar - the US satellite-TV operator that won the hand of market leader DirecTV - posted a wider-than-expected net loss of $42.8 million (€49.3m; £30.1m) for the fourth quarter, though this was an improvement on its $184m shortfall a year earlier.

The loss reflected expenses of $129m, over $40m more than anticipated. Revenues, however, outperformed expectations, surging 43% year-on-year to $1.15 billion, while EBITDA (earnings before interest, tax, depreciation and amortization) stood at $171m.

EchoStar's subscriber base increased by 400,000 in the quarter, a growth rate about 19% lower than that for Q4 2000 – for which the firm blamed the economic slowdown. Nevertheless, the fourth-quarter increase was almost identical to that of DirecTV, which added 405,000 customers during the period.

On the subject of DirecTV, EchoStar chief executive Charles Ergen expressed confidence that the $23.5bn merger would get the green light from regulators "by late summer".

The combination faces considerable opposition, including a host of consumer groups and the National Association of Broadcasters. EchoStar and Hughes Electronics (DirecTV's parent) recently vowed to provide local TV signals in all 210 US markets in a bid to allay fears that the merger would kill competition in rural areas.

Data sourced from: Financial Times; additional content by WARC staff