Echostar profit down on TiVo settlement
 

EchoStar Communications Corp. said net income got cut down more than 50 percent in the first quarter after a million settlement with TiVo Inc. Also distorting comparisons was a 4 million insurance settlement that improved results a year earlier.

The Englewood, Colo., satellite TV Company posted first-quarter net income of 7.28 million, or 33 cents a share, compared with 7.52 million, or 69 cents a share, in the year ago period.

The current quarter incorporated a million payment with TiVo and was affected by accounting changes that came from a new set-top lease program. In April, a Texas jury awarded damages to TiVo after determining that EchoStar had "willfully infringed" TiVo's patent. EchoStar has appealed.

A year earlier there was a huge increase as of the settlement of an insurance claim over a malfunctioning satellite. Revenue rose to .29 billion from billion last year. Wall Street had estimated mean earnings of 46 cents a share and revenue of .28 billion, according to a survey by Thomson Financial.

EchoStar filed its report after the market close. Its shares fell 44 cents, or 1.4 percent, in late trading after closing 13 cents higher at .25 Wednesday on the Nasdaq Stock Market. The company added about 225,000 net new subscribers during the quarter, ending with 12.27 million customers in all. This was a slowdown from the year-earlier period when the company added 325,000 net new users.

Average revenue per user, a closely watched industry metric, was .93 in the quarter, up from a year ago. Subscriber acquisition cost rose 6.7 percent to 5 per subscriber but stayed lower than rival satellite TV Company DirecTV Group, which said subscriber acquisition cost was 8 per user in the same period. Earnings before interest, taxes, depreciation and amortization declined 2.3 percent to 2.4 million.

EchoStar attributed the slowdown on AT&T Inc., which has been testing its own TV service and is expected to roll out the product in limited markets later this year. EchoStar said subscriber additions could slow further as AT&T de-emphasizes, or discontinues altogether, its efforts to sign up EchoStar subscribers.

EchoStar also blamed the slowdown on increased competition. Satellite TV providers are seen as an inconvenience as cable operators and telecommunications carriers rush to offer bundles of TV, telephone and Internet service.

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