EchoStar Posts Q1 Profit

May 5, 2005  •  Post A Comment

EchoStar Communications announced Thursday that it swung to a first-quarter profit, as the No. 2 satellite operator added nearly 325,000 net new subscribers.

The Englewood, Colo.-based company reported a profit of $318 million, compared with a year-ago loss of $43 million, driven by strong subscriber growth as well as a $134 million gain related to an insurance settlement for a problem satellite. Revenue surged 28 percent to $2.02 billion.

The company said it was able to reduce customer churn even as it raised subscriber rates in the quarter, bringing its rate of customer defections to 1.44 percent from 1.48 percent a year ago.

Despite the strong results, EchoStar warned that its relationship with telephone giant SBC Communications is changing and could contribute to a slower rate of growth at the satellite company.

SBC and EchoStar agreed several months ago to join forces to enable SBC to offer a video component to its bundled package of telephone and high-speed data services. However, SBC is moving toward offering its own video solution, and as a result is de-emphasizing its relationship with EchoStar.