EchoStar Earnings Move Into The Red

[Scott Greczkowski]

EchoStar Earnings Move Into The Red

By Jeff Malester -- TWICE, 5/6/2004 8:34:00 AM

Englewood, Colo. — Dish Network satellite digital-television services provider EchoStar Communications recorded a first quarter 16 percent increase in revenue, hitting $1.6 billion, up from $1.4 billion in the year-ago period.

But the company reported a net loss of $42.9 million in the first three months, compared with net income of $57.9 million year-on-year, due primarily to $78 million in charges associated with the early redemption of bonds. The pro forma net loss was $47.1 million in the first quarter, compared with a pro forma profit of $53.8 million in the same three months last year.

Read the rest at http://www.twice.com/article/CA415531.html?display=breaking+news

 

[Mike Greer]

Could it be that the darn cable pig - at least in many areas - has more HDTV than Dish and Direct and their customer service is improving rather than going down the toilet like Dish?

I'm sure the 322, 522, 721, 811, and 921 receivers have not helped them win any customers either.

Let's hope Dish uses this as a wake up call and that they get back to common sense business. They really were a leader - maybe they'll get back to it.

 

[Juan]

I guess you didnt see the part about gaining 360,000 new subs

 

[rad]

I guess you didnt see the part about gaining 360,000 new subs

And how much is it costing E* to get that 360K? Charlie's out pushing PVR's which he normally would sell a 510 for $299+, or a 522 which has got to cost more. He's 'giving' those away from free so how much is it costing E* to install all the hardware to get those subs?

 

[Juan]

long term long term..but still alot less than its costing D*

 

[GaryPen]

long term long term..but still alot less than its costing D*

Hmmm. A DirecTivo cost $99 for new subs. A 510 is free. A Hughes HD box is $249-$299. The 811 is free. DirecTV has fewer sats/transponders, thus fewer costs in those areas. And, DirecTV probably has less development and manufacturing costs, since their hw is designed and manufactured by 3rd parties. Yet, they provide superior products to Dish. Ironic

I suppose DirecTV does spend more than Dish for customer service. They definitely spend more on marketing and brand recognition.

 

[Mike Greer]

I guess you didnt see the part about gaining 360,000 new subs

I did see that but how many new customers would they have if they paid a little more attention?

Dish is giving away receivers that I would think would help them a great deal... Problem is that with all the hardware trouble they are having it has to be costing them a fortune in money and reputation.

I applaude Dish Network for telling Viacom to go to hell - who do they think they are anyway? I just wish they could get control of their hardware and the misinformation spewed by their CSRs.

Maybe this will get Dish Network back on track - I hope!

 

[JosephF]

I think Dish is on track just fine, or did you guys miss this part of the statement:

"due primarily to $78 million in charges associated with the early redemption of bonds"

The only reason there was a loss, was because they saw an opportunity to payoff some bonds early. This is a very large positive in the cash business model that E* operates within. Take this away and they were $35M positive. This is great long term thinking. Something that is missing far too often in the American business community.

 

[Mike Greer]

I think Dish is on track just fine, or did you guys miss this part of the statement:

"due primarily to $78 million in charges associated with the early redemption of bonds"

The only reason there was a loss, was because they saw an opportunity to payoff some bonds early. This is a very large positive in the cash business model that E* operates within. Take this away and they were $35M positive. This is great long term thinking. Something that is missing far too often in the American business community.

I flunked Businiess 101 - a $35M gain looks much better than a $42M loss. I'm not sure if they are on track or not but they could be much better off if they could get the hardware problems under control. I hate the cable co.!

 

[GaryPen]

The right track financially is of primary concern to shareholders. I believe MIke was referring to getting back on track in regard to quality of goods and services, which is of primary concern to subscribers.

 

[Juan]

Hmmm. A DirecTivo cost $99 for new subs. A 510 is free. A Hughes HD box is $249-$299. The 811 is free. DirecTV has fewer sats/transponders, thus fewer costs in those areas. And, DirecTV probably has less development and manufacturing costs, since their hw is designed and manufactured by 3rd parties. Yet, they provide superior products to Dish. Ironic

I suppose DirecTV does spend more than Dish for customer service. They definitely spend more on marketing and brand recognition.

Most of E* customers are DHA..sooo E* still own the receivers!!!(the customers are leaseing them) I f you looked at the latest JDPower consumer survey D* is only ahead of E* by a point or 2 but both are way way way ahead of cable

 

[Juan]

I did see that but how many new customers would they have if they paid a little more attention?

Dish is giving away receivers that I would think would help them a great deal... Problem is that with all the hardware trouble they are having it has to be costing them a fortune in money and reputation.

I applaude Dish Network for telling Viacom to go to hell - who do they think they are anyway? I just wish they could get control of their hardware and the misinformation spewed by their CSRs.

Maybe this will get Dish Network back on track - I hope!

Who has higher quality Macy's or Walmart? macy's does!! but who makes more money WALMART does!!price first quality second for most people.. besides to the avearge joe those so called receiver problems are irrelvant..its only tv

 

[JosephF]

And if I remember correctly, the only thing D* beat E* on in the JD Edwards survey was on existing customer offerings.

I also agree with Juan on the Macy's/Walmart comparison. DVR, units are a perfect example. Everyone here whines about E* not having name-based timers, but E* is serving what Joe customer really wants... basically a digital VCR. Do they have the best poweruser device, no. But they do provide the best average consumer DVR device in the 510.

 

[GaryPen]

Who has higher quality Macy's or Walmart? macy's does!! but who makes more money WALMART does!!

You are absolutely, positively, 100% correct. But, just because it's true, doesn't mean it's right.

On second thought: Perhaps there is hope for people, after all. If price were the only consideration, then there's be a lot more Caveliers purchased than Civics, or Malibus vs. Accords. But, plenty of peole want sre willing to spend a little more to get a lot more.

People don't just want low prices, they want VALUE.

 

[bcshields]

I think Dish is on track just fine, or did you guys miss this part of the statement:

"due primarily to $78 million in charges associated with the early redemption of bonds"

The only reason there was a loss, was because they saw an opportunity to payoff some bonds early. This is a very large positive in the cash business model that E* operates within. Take this away and they were $35M positive. This is great long term thinking. Something that is missing far too often in the American business community.

Or are they paying off debt to look more attractive to buyout offers....

Then again you can say they're paying off debt to afford more for acquisition.

I didn't fail Business 101 (got a B), but I haven't taken any other courses yet. I just think a buyout/acquisition conspiracy theory is more fun.

 

[HDTV Rookie]

I guess you didnt see the part about gaining 360,000 new subs

They may have gained 360,000 new customers, but I wonder, what was there churn rate? How many customer have left? Those 360,000 new customer, don't mean anything if they lost 365,000 customers.

Also, Keep in mind, dish is subsidizing the equipment, it may not be much, but E* can't start calculating profit until the break even point is met between the equipment cost and the monthly sub fees.

Also, you need to ask, are the numbers they released EBITDA #'s and are they adjusted.

 

[Juan]

360,000 new subs net!! churn is already factored in

 

[Peter Parker]

The numbers you see reported are always net new customers. The churn BTW was 1.48% Do the math and you willsee how amny signed up and left.

I suggest you read the full earnings report for some of your questions. The numbers are all qualified. Check the stock forum.

 

[DishSatUser]

Just like previously mentioned in this thread, paying off debt is always a positive. When you owe less money to creditors, the next time you need to pay your bills, you will have less to pay.

Paying down the debt when they have opportunity, allows E* to have a more positive cash flow in the future.

Don't expect Rupert & Co, to be doing this anytime soon due to the extra costs of purchasing D*.