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DirecTV Helps Hughes 4Q

Discussion in 'DIRECTV General Discussion' started by Steve Mehs, Jan 16, 2003.

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  1. Steve Mehs

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    The improving operating performance at DirecTV U.S. helped Hughes Electronics in the fourth quarter, but company officials said they still need to deal with issues at other units - including struggling DirecTV Latin America.

    During a conference call Wednesday, executives hyped efforts taken at DirecTV during the past 18 months to lower churn, reduce subscriber acquisition costs and increase monthly revenue per subscriber. They said that work helped DirecTV fourth quarter revenues increase by more than 19 percent to about $1.8 billion and push up EBITDA to $191 million when compared to the same period in 2001.

    DirecTV ended 2002 with 11.18 million subscribers. As for projections, DirecTV execs said they expect the service to add between 750,000 and 800,000 net subscribers in 2003. The company also plans a $2 rate increase for certain packages.

    Shaw said Hughes continues to shut down its DirecTV DSL service and address issues surrounding DirecTV Latin America. The CEO said DirecTV Latin America's "condition is unacceptable" and that a bankruptcy for the unit may come at the end of the month.

    Shaw said Hughes moved quickly to address issues facing DirecTV Broadband and DirecTV Latin America as soon as its proposed merger with EchoStar was terminated. "As a result of our recent announcements to shutdown DirecTV Broadband and restructure DirecTV Latin America, we expect to reduce our cash requirements by several hundred million dollars over the next few years," he said.

    Spaceway, Hughes' next-generation satellite platform, has met most of its cash requirements, Shaw said. The platform needs $400 million - mostly for the launch of satellites - to get to the next step, he said. Shaw emphasized that Spaceway will be marketed to enterprise customers when it rolls out in 2004, and will target residential users when that potential "is proven."

    Shaw wouldn't elaborate on any potential acquisition of his company. It's expected that News Corp. may bid for the Hughes and DirecTV assets. Hughes abandoned its merger with EchoStar in December due to government antitrust concerns.

    Hughes reported fourth quarter revenues increased 8.3 percent to $2.471 billion, compared with $2.281 billion in the fourth quarter of 2001.


    From SkyReport (Used with Permission)
     
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