slid 7% Tuesday after the company posted weak third-quarter numbers.
The soft data ranged from lower-than-expected revenue and subscriber additions to a weak performance in average revenue per subscriber. EchoStar shares fell $2.24 to $34.56.
The company -- which operates Dish Network, one of the nation's two biggest direct-broadcast satellite systems -- indicated that subscription growth was hurt by delays in deliveries of newly developed products. EchoStar also said that revenue was hurt by discounting and promotional giveaways.
With EchoStar facing competition from both cable operators and
, operator of the rival DirecTV DBS service, investors were wondering Tuesday whether EchoStar was losing momentum.
Whatever competitive situation the company is in already, the market for multichannel television service promises to get even tougher if and when Rupert Murdoch's
completes its planned acquisition of a controlling stake in Hughes.
CEO Charlie Ergen, who has a well-deserved reputation for bluntness in assessing EchoStar's performance, said the company was slow in reacting to delays in getting new products to market. Specifically, the company was late in delivering high definition receivers, set-top boxes containing multiple receivers, and the company's SuperDish product for receiving more local channels.
"We failed on all three of those counts," Ergen said. "Those are pretty tough products to engineer. ... We obviously bit off a little bit more than we could chew."
The SuperDish product is rolling out now, said Ergen, but it's already halfway through the fourth quarter. The high-definition selling season starts in September, Ergen said, but the company will be delivering only limited amounts of high-def equipment by the end of the year. "For the most part, we're going to miss the
HDTV holiday season," said Ergen.
For the third quarter ended Sept. 30, revenue was $1.45 billion, up from $1.22 billion in the corresponding year-ago quarter but below the Thomson First Call consensus of $1.48 billion.
Dish Network added about 285,000 net new subscribers in the latest quarter, compared with 320,000 net new subscribers a year ago. Analysts had expected about 300,000 net additions in the third quarter, according to SoundView Technology's report of Wall Street's consensus. EchoStar had a total of about 9.1 million subscribers as of Sept. 30.
On a conference call with analysts, Ergen said he was disappointed by the company's subscriber growth numbers. "We didn't take advantage of a pretty robust market for satellite," he said.
Average monthly revenue per subscriber was $50.79, down from $51.60 in the second quarter but up from $49.04 in the third quarter of 2002.
Ergen expressed optimism that the third-quarter promotions that depressed ARPU, as the figure is known, would pay off as the promotions expired and customers started paying full price for the discounted packages.
EchoStar also said Tuesday that its board had authorized the repurchase of up to $1 billion worth of EchoStar stock.