EchoStar Reports Higher Revenues, Losses3/21/1999 7:00 PM Eastern
Littleton, Colo. -- EchoStar Communications Corp.'s
fourth-quarter-1998 losses were up about 47 percent over year-earlier figures, due largely
to increases in marketing and subscriber-acquisition costs, the company announced last
Net losses for the quarter totaled $113 million, compared
with $71 million in the fourth quarter of 1997.
During the recent holiday selling season, the
direct-broadcast satellite company ran aggressive promotional campaigns, including free
hardware offers, to help draw new customers to its Dish Network service. Marketing
expenses for the quarter totaled $135 million. The company signed 331,000 new subscribers
during the quarter.
Bob Berzins, senior vice president of high-yield research
for Lehman Bros. Inc., said that even considering the subscriber-acquisition costs,
EchoStar's basic business model still works, considering that Dish Network's
annual subscriber churn remains below 15 percent.
"EchoStar and DirecTV [Inc.] have both done a great
job of controlling churn," so they can afford to pay several-hundred dollars for new
subscribers, he said.
EchoStar's overall numbers were "excellent"
and consistent with expectations, Berzins added.
Fourth-quarter revenues were 60 percent higher, at $287
million, than in 1997. EchoStar reported premarketing cash flow of $90 million for the
quarter, compared with $53 million in the fourth quarter of 1997.