DirecTV Helps Hughes Revenue Boost

Upon reporting its third quarter 2002 results, Hughes Electronics Corp. said that revenues increased 5.3 percent to $2,214.2 million, compared with $2,103.3 million in the third quarter of 2001.

EBITDA for the quarter increased to $243.5 million compared with $76.5 million in the third quarter of last year. The operating loss for the third quarter of 2002 was $23 million compared with an operating loss (excluding the severance charges) of $138.4 million in the third quarter of 2001.

"The increases in Hughes' third quarter revenues and EBITDA were driven mainly by superior operating performance at DirecTV U.S.," said Jack A. Shaw, Hughes' president and chief executive officer. "Over the past few quarters, we have implemented several changes at the DirecTV U.S. business that were specifically designed to maximize subscriber returns and cash flow."

Shaw said that DirecTV U.S. added 206,000 net subscribers compared with an original estimate for the quarter of 250,000 to 300,000 subscribers for the quarter. According to the company, the shortfall was due to increased churn resulting from fighting signal piracy by replacing customers' older generation conditional access cards as well as slightly lower than expected sales through Hughes' national distribution network. "At the same time, consistent with our goal to maximize profitability, third quarter DirecTV U.S. EBITDA of $196 million was 31 percent higher than our original guidance," said Shaw.

Regarding the pending merger with EchoStar, Shaw added, "We are disappointed that the Federal Communications Commission has designated the matter for administrative hearing. We will continue to work aggressively within the context of the FCC and Department of Justice processes to achieve approval of the merger."

From SkyReport (Used with Permission)