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Updated from 1 p.m.

Hughes Electronics


posted a steep fourth-quarter loss Tuesday, though the direct satellite broadcaster posted solid subscriber growth and said customer defections fell to a four-year low.

On a conference call with analysts Tuesday afternoon, newly installed CEO Chase Carey talked at length about new management's plans to remake all aspects of the business aggressively -- and to spend aggressively over the next year as well.

For its fourth quarter ended Dec. 31, the El Segundo, Calif., operator of DirecTV posted a loss of $310 million, or 22 cents a share. That falls well short of the nickel-a-share loss expected by Wall Street analysts and reverses a year-ago profit of $113 million, or 8 cents a share.

The latest quarter includes a pretax charge of $132 million related to the change in control at the company, as well as increased marketing costs at DirecTV U.S. associated with higher subscriber acquisition costs. The year-ago profit reflected a pre-tax gain of $600 million stemming from a settlement with onetime merger partner


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Fourth-quarter revenue rose to $2.95 billion from $2.47 billion a year earlier, beating the Thomson First Call analyst consensus estimate of $2.8 billion.

Hughes' shares rose 58 cents to close at $17.68 Tuesday.

The company, which is now controlled by Rupert Murdoch's

News Corp.

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, cited strong subscriber growth at DirecTV U.S., which added 861,000 gross owned and operated subscribers and 405,000 net owned and operated customers.

The company had a total of 10.7 million subscribers as of Dec. 31, up 13% from a year ago. Including subscribers in territories in which DirecTV is marketed by the National Rural Telecommunications Cooperative, DirecTV's subscribers amounted to 12.2 million.

Hughes said DirecTV U.S. average monthly churn fell to 1.45%. Monthly average revenue per user rose by $7, or 11%, to $71.70.

Average per-subscriber acquisition cost was $640 in the quarter, up from $555 in the fourth quarter of 2002 and $590 in the third quarter of 2003.

Operating profit before depreciation and amortization -- the cash flow metric often referred to as EBITDA -- amounted to $160 million, below the year-earlier figure of $282 million as well as the company's previous guidance in the range of $250 million to $300 million.

After adding back the $132 million in selling, general and administrative charges relating to the News Corp. transaction, the adjusted OPBDA number of $292 million nearly matches the median First Call number. Analysts had forecast a wide OPBDA range for the quarter, from $237 million to $431 million.

Though Carey told analysts the company would no longer supply detailed quarterly or annual guidance, Carey did make a few forecasts. He said the company expected to reach a total of 15 million subscribers, including NRTC's, in three years. Churn should be lower than in 2003, while subscriber acquisition costs should be higher. Retention marketing, or spending in service of discouraging customers from leaving the service, should be higher as well, he said.

But Carey said the company wasn't interested in engaging in a price war with its competitors, adding that it had recently instituted a price increase in the 3%-4% range.