Echostar Communications Corporation (DISH) revenue for the third quarter ending September 30, 2007, increased by 12.9 percent to finish at $2.79 billion. Last year in the same period they generated $2.48 billion in revenue for the quarter.
The satellite television operator had net income increase to $199.7 million, or 44 cents a share. That compares with the $139.6 million or 31 cents a share earned last year. Profit increased from the selling of high-end services and cutting costs of customer equipment.
Concerning adding new subscribers, the company dropped a large amount from last years' third quarter, bringing in about 110,000, while last year they brought in 295,000. The company attributes the decline to increased competition and non-payment disconnects related to economic conditions. the company ended the quarter with about 13.7 million subscribers.
On the competitive side, cable companies like Time Warner Cable (TWC) and Comcast (CMCSA) offering the triple play package of phone, video and high-speed access continues to pressure the company, as well as growing competion from the telcos like AT&T (T) and Verizon (VZ) who are starting to offer quality digital video services along with their Internet and phone services as well.
The company has been able to grow revenue per subscriber based on increasing programming and equipment rental in relationship to high-definition television. Per subscriber revenue increased by 4.3 percent to finish at $66.01 for the quarter. Last year revenue per subscriber was at $63.28 for the third quarter.
While some macroeconomic issues have affected the company, it also has an impact upon their competitors. The only issue to consider for Echostar is how are they going to grow from here.
They can only raise their rental fees so far, and there are only a limited number of consumers that could continue to pay increases.
Echostar confirms that new subscriber growth is going to be hard grow strongly from now on, based on economic and competitive factors. I don't see where they can go from here as a stand alone company.
The rumors that they may spin off its technology assets and leave the satellite service to trade separately could become a reality. If it does, it also raises the possibility that AT&T could buy them up as a quick way to grow their video service to compete with the cable industry.
It looks like that will more than likely be the scenario investors will face in the months ahead. Otherwise they'll see a company with very little prospects for growth.
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