Dish Burned by Churn

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EchoStar Communications Corp. reported its highest churn ever in the third quarter -- 1.88% -- a metric that chairman and CEO Charlie Ergen said was caused by normal seasonality for the period and hurricane damage in the south.

“It was a solid quarter overall,” Ergen said on a conference call with analysts. “Some things are a little bit misleading.”

He added that as a result of the hurricanes in the Gulf Coast, EchoStar attempted to contact subscribers in Alabama and Louisiana. Those who did not respond were disconnected.

Ergen said those former customers could come back on as new additions once their living situations become more stable.

“Absent the hurricanes, our churn would be slightly below last year,” he said. “We are a little bit more conservative as a company. If a customer’s house is blown away and is not there anymore, and it’s going to take them a year to rebuild it, we might not want to pay for that customer for the next year -- we might want to just write them off now.”

For the quarter, EchoStar added about 255,000 net new subscribers. Revenue rose 14.2% to $2.13 billion and cash flow was up 55% to $508 million.

EchoStar stock was down 62 cents each to $26.30 per share in afternoon trading Tuesday.

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