E* outdoes D* in last Quarter

[Tom Bombadil]

http://www.msnbc.msn.com/id/17419422/

Note that E* picked up 350,000 new subs in the 2006 Q4 vs D*'s 275,000.

This despite the loss of the distant nets, the TIVO lawsuits, and all of the associated stories that ran which seemingly showed E* in disarray.

With all of the grumbling about the distant nets, and conjecture here about how much that would hurt E*, I find it amazing that they actually went out and had a very successful quarter. There is nothing in these numbers to indicate that the distant nets problem hurt them very much.

Total net revenue is up 17% from a year ago, to 2.58 Billion in the quarter.

 

[snook2448]

The Full Story

EchoStar's Net Rises 15% On Subscriber Growth

EchoStar Communications Inc., the country's No. 2 satellite TV provider, posted a 15% rise in fourth-quarter net income, driven by better-than-expected subscriber growth and a 17% revenue increase.

The Englewood, Colo. company added about 350,000 net new subscribers during the December quarter, more than many analysts expected. EchoStar ended the year with 13.11 million subscribers, up 1.07 million subscribers from 2005.

Like its rival, DirecTV Group Inc., EchoStar has deliberately tightened credit policies for more than a year. This has helped improve profitability but slowed subscriber growth. Subscriber growth appeared weak through most of 2006 because of the credit policies. Subscriber growth was also expected to be slowed a bit in the quarter because the company lost a court battle over its carriage of "distant signals" that forced it to pull ABC, CBS, NBC and Fox stations in an estimated 800,000 to 900,000 customers throughout the country.

Despite the issues during the quarter, EchoStar ended up adding more subscribers than rival DirecTV, which added 275,000 net new subscribers during the quarter.

The fourth quarter "marked the fourth time in the past five quarters that EchoStar outperformed DirecTV in net additions," Cowen analyst Tom Watts wrote in a note. Mr. Watts had anticipated 270,000 net additions during the quarter.

EchoStar earned $153 million, or 35 cents a share, in the fourth quarter, up from $133 million, or 30 cents a share, a year earlier. Revenue rose 17% to $2.58 billion from $2.2 billion a year ago.

Fourth-quarter results "paint a picture of a company that is rolling along nicely, thank you very much," Craig Moffett, analyst at Sanford Bernstein, wrote in a note.

Despite the better-than-expected subscriber figures, Mr. Moffett noted that some concerns lurk in the numbers. Profit margins were weak with gross margins at the lowest level since 2004. Also, subscriber acquisition costs, at $704 per subscriber, were higher than expected, he said.

Satellite companies have faced pressure from cable companies in the past year as customers are lured away by cable providers' popular "triple play" bundle of TV, Internet and phone services. This has been a challenge because satellite companies aren't able to offer competing bundles without the help of a partner.

EchoStar is also embroiled in numerous legal battles. Among them, the company's patent case with TiVo Inc. doesn't seem to be letting up any time soon after a federal appeals court decided in October to let EchoStar continue offering its digital video recorder service while it appeals an earlier jury ruling that it had infringed on TiVo's patent.

 

[BobMurdoch]

Wow. Talk about doing well in a headwind.....

I can't figure this one out.... What are they saying accounts for all this? HD DVR?

 

[jahlight]

Well D* just offered me a free HD DVR so I signed up and cancelled my E* account. I have been with E* for 2 years but D* has my locals in HD, more HD sports, Sunday Ticket and now maybe the MLB EI, I just had to switch. The free HD DVR offer sealed the deal for me. Not to mention I will be saving a good $30 a month on programming costs. By E* it's been fun!

 

[Peter Parker]

That quarter wasa holiday season. taht si one factor. Remember that D8 was reporting somewhat lowere growth because they have become more selective.

Still kudos to echostar on the sub growth.

 

[bgsmallwood]

It's because E* has more HD channels...

That is why I switched from D* to E*

HD is catching on and E* has much more HD content. Heck, when I left D* a few months ago they were actually turning one HD channel off every Sunday so they could carry all of the NFL-ST games in HD. How amateurish is that?

 

[navychop]

Who was it that said "There's no such thing as bad publicity?"

 

[BobMurdoch]

Paris Hilton or Antonella Barba probably....

 

[Cyclone]

Well, When I put that "PM me for a Dish Club Card Number" last fall, I had no shortage of takers.

 

[riffjim4069]

Note that E* picked up 350,000 new ....95 offer another year or two...;) :confused:

 

[DishSubLA]

http://www.msnbc.msn.com/id/17419422/

Note that E* picked up 350,000 new subs in the 2006 Q4 vs D*'s 275,000.

This despite the loss of the distant nets, the TIVO lawsuits, and all of the associated stories that ran which seemingly showed E* in disarray.

With all of the grumbling about the distant nets, and conjecture here about how much that would hurt E*, I find it amazing that they actually went out and had a very successful quarter. There is nothing in these numbers to indicate that the distant nets problem hurt them very much.

Total net revenue is up 17% from a year ago, to 2.58 Billion in the quarter.

Not at all surprised with the growth: lower pricing, powerful word of mouth, incentives with the Club Dish, better 2-tuner DVR and 2-tuner HD DVR, overall, a lot of satisfied customers.

I am surprised to see the increase subs spend per month which has always been Wall Street's main problem with Dish. Also the cost of acquiring subs has decreased, although just a bit, bit it adds up to a fair amount of $$.

Let's not forget that the vast majority of people have no idea about the lawsuits (Direct and Cable have their own disputes in civil court) and loss of Distant Networks. It's all industry news (and interesting news to us on the boards), and most people really don't care. All sorts of larger more well-known companies are in court suing or being sued. The consumers just don't care. What they care about are the prices, reliability of service, quality of customer service, and DVR--once they get one. Ergan, whether you like him or not, has been a record breaker in adding subs for years, and he continues to do it despite being massively outspent by Direct TV's VERY expensive to produce and VERY expensive to air commercials. Even the stars in the Direct TV ads can't seem to help.

My main concern would be about Direct's huge advertising expenses compared to Ergan's superior growth rate with the increase in spending by subs and the slight decline in churn rate. Yes, Direct targets the high end consumer, but big, low-cost retailers RULE.

Every business journal and business columnist have been predicting satellite's immediate demise every 6 months for at least the last 5 years. Now this news from Echostar. It affirms that regardless of "triple play" people want a, quality service that meets their modest needs and modest budget, but can still provide a great DVR product while offering decent upgrades and who treat the customer, most of the time, fairly well. IMHO.

The really unbeliveable sub increase in a quarter was Direct TV's the very same quarter that Rupert Murdoch acquired Direct (I forget the exact number, but I believe it was close to 500,000). Hmmmm? It certainly helped the stock price in the short term. Even Ergan referred to it as a "phenomenal number." We haven't seen such a number even approaching that from Direct since.

Let's face it: Ergan is the better CEO of satellite.

 

[navychop]

Yes. They really don't seem to have had anyone terribly involved at the top at DTV, until Murdoch- and he cut and ran.

 

[whitewolf8214]

I thought about switching over to D but for the NFLST awhile back and was offered a free hd dvr but said no because the pricing is cheaper with E.No package or programming should be exclusively to one provide whether it's cable or satellite.Isn't that what competition is all about.The more competition the cheaper the price is.Open up every package(NFLST,MLBEI,NCAATOURNAMENT PACKAGE)and and programming(VOOM,ETC) to eevrybody and let the customer decide who has the best programming,prices and picture quality and quantity.I remember when NFLST was 79.00 and is almost 300.00 now and imagine if D gets MLBEI what that is gonna cost in a few years.