EchoStar Communications Corp. added 350,000 new customers and boosted income in the fourth quarter, despite an increase in competition and a loss of some channels.
The Douglas County-based satellite-TV provider reported fourth-quarter earnings of $153 million, or 35 cents a share, compared with income of $133 million, or 30 cents a share, for the same period in 2005. Revenue was up 17 percent at $2.6 billion.
EchoStar president Carl Vogel said demand for high-definition services and digital video recorders fueled the company’s growth.
“We’re pleased where we stand with HD; we’re not backing away,” Vogel said during an analysts call. “We think we have an advantage with the set-top box and pricing.”
Shares of the nation’s second- largest satellite-TV company rose more than 5 percent on the news, closing up $2.08 Thursday at $42.68.
At the end of 2006, the company reported 13.1 million subscribers, up 1.1 million from the end of 2005.
“I think it’s a real feather in our cap, as we had 900,000 lost distant-network signals,” said chairman and chief executive Charlie Ergen. “Our churn (rate of losing customers) actually went down year-over-year.”
For the year, income was $608 million, compared with $1.5 billion for 2005. The 2005 figures included one-time tax and insurance benefits of $727 million.
The results beat analysts’ expectations that EchoStar’s growth would slow because of tough competition from cable and telecommunications companies offering bundling packages of telephone, TV, Internet and cellphone services. Analysts polled by Thomson Financial were looking for a profit of 32 cents a share.
“The results show that they’re still beating the bundle,” said Jimmy Schaeffler, senior multichannel TV analyst for the Carmel Group. “It surprises me because of the competition and because of the distant-network-signals litigation. Both seemed to be working against them in the fourth quarter.”
He said there could be some negative “spillover” for Echo- Star in the first quarter of 2007, which will be reported in May.
EchoStar did not give an exact number of subscribers lost to the cancellation of out-of-market broadcast networks during a conference call.
Last year, a Florida District Court judge ruled that EchoStar had to stop offering distant-network signals to subscribers Dec. 1 because the company had violated federal broadcasting regulations. EchoStar complied but entered into a partnership with another company, NPS, to sell the channels to customers.
Ergen said NPS gained about 100,000 of EchoStar’s distant- network customers.
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
