Though

Hughes Electronics

(GMH)

fell short of subscriber growth expectations in its latest quarter, the satellite TV operator's optimistic view of 2002's second half doesn't look like a stretch.

But even though Hughes raised financial guidance and reiterated subscriber growth numbers for its flagship U.S. market, investors -- perhaps worried about offsetting estimate cuts in the company's Latin America operations -- clipped more than 7% from the company's stock price.

Hughes, which operates DirecTV and hopes to merge its home satellite business with that of

EchoStar Communications

(DISH) - Get Report

, said Monday it netted only 202,000 new subscribers to its U.S. operations in the second quarter ended June 30.

That fell far short of analysts' expectations of about 250,000 net new subscribers for the flagship U.S. service, a goal at the top end of the company's guidance range of 200,000 to 250,000 net additions. (The company counts 9 million subscribers owned and operated by DirecTV as of June 30, plus 1.75 million subscribers in territories operated by the National Rural Telecommunications Cooperative.)

Despite the second-quarter shortfall, the seasonality of satellite service growth appears to give Hughes plenty of wiggle room in its effort to meet its full-year subscriber addition target of 1.2 million households. Given the subscriber additions in the first quarter of 2002, Hughes is betting that 55% of DirecTV's new 2002 subscribers will be added in the second half of the year. That's a modest goal compared with last year's business activity, in which 62% of new subscribers arrived in the second half of the year.

Meanwhile, the percentage of subscribers who are dropping DirecTV appears to be dropping. In the second quarter, 452,000 subscribers dropped the service, compared with 570,000 in the second quarter of 2001.

"The demand for DirecTV in the U.S. continues to be strong," said CEO Jack Shaw, on the company's afternoon conference call with analysts. The company raised full-year revenue guidance for DirecTV in the U.S. from $6.2 billion to $6.3 billion, and edged guidance for earnings before interest, taxes, depreciation and amortization from $525 million to a range of $525 million to $545 million.

That being said, economic woes in Latin America caused Hughes to lower forecasts for that operation and make no changes in companywide guidance.

In afternoon trading, Hughes' shares traded at $8.98, down 70 cents.

Elsewhere on the call, Shaw said the company still believed it could get regulatory approval for the EchoStar deal, which has encountered vocal opposition in Washington, and complete the transaction by the end of the year.

And addressing marketwide concerns about the reliability of EBITDA -- a common bottom-line yardstick among media companies -- Hughes told analysts on the call that it believed its reported ebitda was more conservative than EBITDA reported by cable companies with which the company competes.