EchoStar swung to a profit and added subscribers last quarter, reminding the industry and Wall Street that it’s still got plenty of muscle even after losing a bid for rival DirecTV to Rupert Murdoch’s News Corp.
EchoStar posed a net profit of $58 million for the first quarter, compared with a loss of $35 million the year before. Revenue rose 23% to $1.4 billion. Shares rose more than 5% to a new year high of $32.17.
EchoStar charges more than DirecTV. It added more subscribers during the quarter than DirecTV did, and lost fewer. EchoStar has about 8.5 million subs to DirecTV’s 11.4 million.
The comparisons could get tougher when the News Corp. folks take over, if the conglom’s success with its other satellite platforms, like BSkyB in the U.K., is any indication.
Bad news for cable
Ergen said Murdoch’s control of the nation’s biggest satellite company — which still needs approval from shareholders and federal regulators — is bad news for cable primarily, and a mixed bag for EchoStar. Murdoch will manage DirecTV better than its current owners, GM and Hughes Electronics, he said, and reduce piracy, helping the satellite biz as a whole.
Murdoch also could use his political influence to help the industry. He already has used it effectively to help block the EchoStar deal and was testifying on Capitol Hill Tuesday as to the merits of his own deal.
Ergen also said he has a personal relationship with Murdoch that’s better than his relations with DirecTV’s current owners. That’s no surprise. Ergen promised his proposed merger with Hughes would pass muster with regulators, who turned and nixed it last fall after a yearlong review.
Since that reversal, many on Wall Street and in the industry have wondered if Ergen would keep running the company he founded or step down and sell it.