Earnings: EchoStar Revs Up 24 Percent; Swings To Profit, But Tied To Slowing DISH
This story was written by Joseph Weisenthal.
For now, EchoStar's fate is closely tied to that of its surgically separated Siamese twin DISH, which just reported sharply lower sub growth: Total revenue grew 23.8 percent to $554.5 million in the quarter, and of this about $464 million or 84 percent came from sales of equipment and services to DISH. Non-DISH equipment sales were $74.8 million. Net income swung to a profit of $5.7 million ($.06 per share) from a loss of $18.5 million ($.21 per share)
On that soft DISH subscriber growth the company says: "Changes in DISH Network subscriber growth could have a material adverse affect on our set-top box sales. However, the impact to us of declining DISH Network subscriber growth may be offset over the near term by an increase in sales to DISH Network resulting from the upgrade of DISH Network subscribers to advanced products such as high definition ("HD") receivers, digital video recorders ("DVRs") and HD DVRs, as well as by the upgrade of DISH set-top boxes to new technologies such as MPEG-4. "
Staci adds: The last image I had of CES was one of the cable industry tours visiting the Sling Media booth, just after I got my first look at a combo Slingbox/cable modem . The execs on the tour wanted a better sense of Sling, both as an industry disrupter and competitor EchoStar's latest acquisition. Sling stayed with EchoStar when the latter spun off from satellite provider DISH Networkmaking what's about to happen next possible. In a few days, Sling will be on display for the cable operators again: this time pitching a functional SlingModem and looking for customers at the National Cable Show in New Orleans.
It's the first product the new EchoStar, now made up of equipment sales (which includes Sling) and a fixed satellite services business, will market to what used to be the competition, part of the company's plan to move away from dependence on DISH. It's also the first Sling product from EchoStar (NSDQ: DISH). Connected to a coax cable input or set-top box, the SlingModem can receive live or recorded television on any Internet-connected device. But users can't bop into the nearest big box store, buy one and plug it in, the way they can with Sling's other products. This one is for sale only to operators.
By Joseph Weisenthal