EchoStar Adds Subscribers, Boosts Profit

EchoStar Communications Corp., the second-largest U.S. satellite television service, said Tuesday that profit almost tripled as it added subscribers and raised prices. The company will pay $455 million in one-time cash dividends.

Net income for the third quarter rose to $102 million, or 22 cents a share, from $35 million, or 7 cents, a year earlier, the Englewood, Colo.-based company said. Revenue rose 28% to $1.86 billion.

EchoStar boosted its subscriber count 3.5% to 10.5 million in the quarter, while its larger competitor, DirecTV Group Inc., raised its customer count 4% to 12.1 million. The satellite companies’ lower prices for basic packages of channels are luring subscribers from cable TV companies.

EchoStar’s subscriber-related expenses during the quarter, which include programming and installation costs, rose 36% to $929 million partly because of the higher number of users, the company said. Promotion subsidies rose 52% to $256 million.

Chief Executive Charles Ergen during a conference call with analysts and investors said controlling those costs was one of his top priorities. Satellite and cable companies are competing for a smaller pool of customers, he said.

“The easy customers to get have already been had,” said Craig Moffett, an analyst with Sanford C. Bernstein & Co.

The profit was less than the average estimate of 23 cents a share from 19 analysts surveyed by Thomson First Call. EchoStar’s revenue was more than the average estimate of $1.81 billion from 15 analysts.

The one-time dividend, EchoStar’s first in three years, amounts to $1 a share.

The company decided to issue the dividend because of “favorable tax laws and confidence in our cash position,” EchoStar Treasurer Jason Kiser said.

EchoStar shares rose 69 cents to $30.71 on Nasdaq.