EchoStar swings to 1Q profit, revenue rises 24 pct: Financial News - Yahoo! Finance
ENGLEWOOD, Colo. (AP) -- EchoStar Corp., a satellite service and TV equipment company, said Tuesday it swung to a profit in the first quarter on higher revenue but warned its substantial unused satellite capacity could affect margins.
The company, a spinoff from Dish Network Corp., also said it has suspended construction of a satellite pending a review of performance criteria and may record an impairment charge of up to $100 million.
EchoStar Chief Executive Officer Charlie Ergen declined to be more specific about issues with the satellite but said the company hopes to put it to use eventually.
During a conference call with analysts, Ergen said EchoStar has a lot of available satellite capacity at a time when the market is soft. The company plans to expand its sales force to help increase business, he said.
"There continue to be customers that potentially need capacity but there's also competitors out there that have capacity," he said. "We're all fighting for the same mouth to feed."
EchoStar said in a Securities and Exchange Commission filing that costs associated with the available satellite capacity could result in future impairment charges that could aggregate up to $250 million.
For the quarter that ended March 31, EchoStar reported a $5.7 million profit, or 6 cents a share, which compared with a net loss of $18.5 million, or 21 cents a share, in the year-ago quarter.
Revenue totaled $555 million in the first quarter, up from $448 million in the first quarter of 2007.
Analysts surveyed by Thomson Financial estimated, on average, that EchoStar would post a profit of 1 cent a share on revenue of $494.6 million.
The company sells equipment to Dish Network satellite television subscribers and operates fixed satellite services. It was separated from Dish Network in January.
EchoStar shares slipped 7 cents to $31.47 Tuesday.
ENGLEWOOD, Colo. (AP) -- EchoStar Corp., a satellite service and TV equipment company, said Tuesday it swung to a profit in the first quarter on higher revenue but warned its substantial unused satellite capacity could affect margins.
The company, a spinoff from Dish Network Corp., also said it has suspended construction of a satellite pending a review of performance criteria and may record an impairment charge of up to $100 million.
EchoStar Chief Executive Officer Charlie Ergen declined to be more specific about issues with the satellite but said the company hopes to put it to use eventually.
During a conference call with analysts, Ergen said EchoStar has a lot of available satellite capacity at a time when the market is soft. The company plans to expand its sales force to help increase business, he said.
"There continue to be customers that potentially need capacity but there's also competitors out there that have capacity," he said. "We're all fighting for the same mouth to feed."
EchoStar said in a Securities and Exchange Commission filing that costs associated with the available satellite capacity could result in future impairment charges that could aggregate up to $250 million.
For the quarter that ended March 31, EchoStar reported a $5.7 million profit, or 6 cents a share, which compared with a net loss of $18.5 million, or 21 cents a share, in the year-ago quarter.
Revenue totaled $555 million in the first quarter, up from $448 million in the first quarter of 2007.
Analysts surveyed by Thomson Financial estimated, on average, that EchoStar would post a profit of 1 cent a share on revenue of $494.6 million.
The company sells equipment to Dish Network satellite television subscribers and operates fixed satellite services. It was separated from Dish Network in January.
EchoStar shares slipped 7 cents to $31.47 Tuesday.
