EchoStar Loss Widens on Hughes Breakup Fee

EchoStar Communications Corp. said Tuesday that it had a wider fourth-quarter loss after paying a $600-million breakup fee to Hughes Electronics Corp., while revenue and the number of subscribers rose more than analysts had forecast.

EchoStar’s Dish system, the second-largest U.S. satellite broadcaster, added 400,000 users in the quarter to end the year with 8.18 million, the company said. Revenue rose 15% to $1.32 billion, beating the $1.29-billion forecast of analysts polled by Thomson First Call.

The company is adding subscribers more quickly than its larger rival Hughes’ DirecTV and taking market share from cable companies. EchoStar offers more channels for less money, especially where cable companies haven’t upgraded their systems. The Littleton, Colo.-based company said its subscriber base will grow by at least 1 million, or 12%, this year.

The net loss widened to $715.6 million, or 45 cents a share, from $42.9 million, or 9 cents, a year earlier. The results include expenses of $690 million related to EchoStar’s failed bid to acquire Hughes, a unit of General Motors Corp.

Earnings before interest, taxes, depreciation and amortization rose 13% to $193 million. Investors use so-called EBITDA to measure the performance of highly indebted companies such as EchoStar because it shows how much cash is available to pay down debt.

Shares of EchoStar rose $1.70, or 7%, to $27.65 on Nasdaq.

The number of subscribers at EchoStar rose about 20% last year, compared with 12% at Hughes, which had 11.2 million at the end of December.