As corporate America is reeling, with many firms declaring bankruptcy and
revealing accounting improprieties, EchoStar Communications Corp. turned in one
of the best quarters in its history, boasting a 21 percent increase in revenue
over the same quarter last year.
EchoStar reported $1.17 billion in revenue for second-quarter 2002, compared
with last year's $966 million in revenue.
The rest of EchoStar's numbers looked equally strong, with net income
increasing to $45.8 million during the quarter from a net loss of $5.86 million
EchoStar's EBITDA (earnings before interest, taxes, depreciation and
amortization) grew to $237 million, up 77 percent from $134 million last year.
EchoStar attributed the strong EBITDA numbers mostly to the addition of
295,000 new subscribers, bringing its total to 7.46 million subscribers, a 23
percent increase since one year ago.
EchoStar's stock closed at $17 per share, up $1.64, or nearly 11 percent.
In his typical low-key manner, the best chairman and CEO Charlie
Ergen could say about his company's performance was, "I've always said anybody
can look good when people have overexuberance in the marketplace. But you've
really got to be good to do well when there is pessimism in the marketplace."
Ergen was among some 700 U.S. CEOs who personally certified their company's
earnings results Wednesday -- the result of a new Securities and Exchange Commission
rule that requires all CEOs and chief financial officers of companies with more than $1.2 billion in
annual revenues to take personal responsibility for their companies'
"We didn't feel the need to go through an entirely new audit and pay the fees
to do that, mainly because as CEO, I was under the mistaken impression that we
had to tell the truth all the time," Ergen said. "I didn't realize that we
didn't have to start telling the truth until yesterday."
EchoStar is trying to purchase Hughes Electronics Corp.
and its subsidiary, DirecTV Inc. The company expects the federal government to
determine whether it will approve the deal in October or November.
EchoStar also revealed that 10 unnamed state attorneys general are
investigating the company's customer-service practices, such as long customer
"They certainly offered constructive criticism," Ergen said. "Maybe they have
some misunderstanding of the way our industry works, but some of them gave very
constructive criticisms of some of our policies and I think we can make some
The states' investigations are not related to EchoStar's planned purchase of
Hughes, although the merger does cause EchoStar to come under increased
scrutiny, Ergen said.
Other state AGs, including Missouri's Jay Nixon, are reviewing EchoStar's and
Hughes' merger plans and considering the possibility of suing to block it.