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Hughes 4Q loss widens
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January 15, 2002: 12:37 p.m. ET
Tops revenue, subscriber growth targets; states eye EchoStar proposal.
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NEW YORK (CNN/Money) - General Motors Corp.'s Hughes Electronics unit reported a wider fourth-quarter loss Tuesday in line with expectations, although the satellite television provider topped forecasts for growth in revenue and net new subscribers.
But Hughes (GMH: up $0.13 to $16.93, Research, Estimates), the nation's largest satellite television provider, faces objections from state attorneys general who are weighing action to block its purchase by No. 2 satellite TV provider EchoStar Communications Corp. (DISH: up $0.11 to $28.55, Research, Estimates). Shares of both Hughes and EchoStar were up in early afternoon trading.
Hughes also reconfirmed earlier guidance for full-year results for its various units in terms of revenue, net subscriber additions and earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of profit watched by analysts.
For the fourth quarter, the company posted a loss of $155.9 million, or 12 cents a share, in line with the forecasts of analysts surveyed by earnings tracker First Call. That's up from the loss of $74.5 million, or 6 cents a share, it posted from both continuing and discontinued operations a year ago before the $1.1 billion gain on the sale of its satellite manufacturing operation in the period.
Revenue rose to $2.3 billion from $2.1 billion and topped the $2.2 billion estimate from First Call. The company said it had 405,000 net new subscribers, which it said substantially exceeded expectations.
EBITDA in the quarter was $118.2 million, or 9 cents a share, below both the First Call forecast of 11 cents a share and the year-earlier EBITDA of $153.8 million, or 12 cents a share.
GM is in the process of selling Hughes to No. 2 satellite television provider EchoStar Communications Corp. for cash and stock valued at $26 billion at the time the deal was announced in October. But that deal has raised a number of objections by those concerned about linking the No. 1 and No. 2 satellite television providers.
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A number of state attorneys general are discussing filing a suit to block the deal, a spokesman for Missouri Attorney General Jay Nixon confirmed to CNNfn Tuesday. He said that as many as 30 of the state AGs are discussing such legal action, although he said no letter or notice has gone out at this point.
EchoStar and Hughes officials have said repeatedly their deal will allow them to compete more effectively with the cable television industry, which also is consolidating.
The Missouri AG's office said that the various states are concerned that residents of their states without access to cable will be hurt by the deal between the major satellite providers. He also said lawyers representing rival News Corp., which bid unsuccessfully for Hughes' DirecTV unit, have been voicing their concerns about the deal to the state attorneys general. 
-- Reuters contributed to this report.
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