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EchoStar Posts Profit on Higher Satellite TV Revenue

But the cost of subscriber acquisition jumps.
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EchoStar Communications

(DISH) - Get Free Report

swung to a profit on a 19% jump in sales that reflected continued subscriber additions to its satellite television network.

Littleton, Colo.-based EchoStar earned $35.1 million, or 7 cents a share, in the latest quarter compared with a loss of $167.9 million, or 35 cents a share, a year ago. Total revenue was $1.45 billion in the latest quarter compared with $1.22 billion last year, as subscription television revenue rose to $1.36 billion from $1.12 billion while equipment sales slipped to $70.3 million from $76.6 million.

EchoStar said its Dish Network satellite TV service added about 285,000 net new subscribers in the latest quarter, compared with 320,000 net new subscribers a year ago. The company had a total of about 9.1 million subscribers at the end of the period.

The company said the rate of subscriber growth was hurt in the quarter by delays in delivery of several new products, among other things, adding that "significant deployment" of the products is expected late in the fourth quarter of 2003 and should be completed during the first quarter of 2004.

The monthly average revenue per subscriber was about $50.79 during the three months ended Sept. 30, 2003, up from $49.04 last year thanks to price increases in March 2003 and an increase in the number of subscribers with multiple set-top boxes. The number was clipped slightly by an increase in the amount of free and discounted programming offered during the most recent quarter.

The company said it cost about $466 to add a new subscriber in the most recent quarter, up from $413 a year ago due to a nonrecurring reduction the cost of set-top equipment in the year-ago quarter. It also cited a giveaway promotion and a decrease in subscriber equipment leases in the latest quarter for the rise, and warned that more aggressive promotions could boost the cost further in coming quarters.