The Satellite News Financial Ticker

By | June 2, 2003 | Feature

Week of May 23 – 29, 2003
Percentage Change

Symbol
May 29 Price
One Week
One Month
Three Month
Year to Date
Operators
APT SATELLITE HLDGS ATS
1.87
12.0
46.1
19.9
8.7
ASIASAT TELECOM SAT
16.46
8.3
22.4
32.7
44.5
BRITISH SKY BROADCASTING BSY
43.18
(1.6)
0.1
8.1
7.8
ECHOSTAR COMM -CL A DISH
32.22
3.6
9.0
22.4
44.7
GENERAL ELECTRIC GE
28.25
2.4
(4.3)
17.5
16.0
GILAT COMMUNICATIONS GICOF
0.07
(39.1)
(60.0)
(53.3)
GLOBALSTAR TELECOM GSTRF
0.04
(6.7)
(30.0)
(38.2)
(19.2)
HUGHES ELEC (GM -CL H) GMH
12.18
(1.6)
7.5
19.5
13.8
IRIDIUM WORLD COMM IRIDF
0.14
3.7
(31.7)
33.3
27.3
LORAL SPACE & COMM LOR
0.36
(5.3)
38.5
(16.3)
NEWS CORP NWS
30.50
4.7
9.4
22.0
16.2
NEW SKIES SATELLITES NSK
6.78
14.3
55.9
58.8
63.4
PANAMSAT SPOT
18.59
5.9
7.3
34.1
27.0
PASIFIK SATELIT NUSANTARA PSNRY
0.13
(19.4)
127.3
(21.9)
(16.7)
PEGASUS COMMUNICATIONS PGTV
25.61
2.5
(2.3)
54.6
95.5
SES GLOBAL SES.LU
5.30
4.7
1.9
14.2
(17.2)
SIRIUS SATELLITE RADIO SIRI
1.35
26.2
87.5
77.6
110.9
XM SATELLITE RADIO XMSR
11.18
14.3
16.6
137.4
315.6
Operators’ Average 100.00
1.6
20.1
24.0
37.2
Manufacturers
ANDREW ANDW
9.79
4.8
35.0
28.3
(4.8)
BALL BLL
49.26
(4.9)
(13.6)
(7.5)
(3.8)
BOEING BA
29.95
4.0
9.4
8.7
(9.2)
COM DEV INTL CDV
0.41
(6.8)
6.5
(19.6)
(31.7)
GILAT SAT NETWORKS GILTF
4.05
1.3
8.3
(48.1)
(48.1)
GLOBECOM GCOM
3.12
1.6
6.8
0.6
(16.8)
HARRIS HRS
30.20
3.9
7.8
0.8
14.8
HONEYWELL HON
26.05
8.8
13.0
13.8
8.5
KVH KVHI
21.20
13.4
43.2
112.0
146.5
LOCKHEED MARTIN LMT
46.56
(1.7)
(7.8)
1.8
(19.4)
LUCENT TECHNOLOGIES LU
2.26
(8.1)
29.1
37.8
79.4
MOTOROLA MOT
8.70
4.8
8.6
3.3
0.6
NERA NERAY
1.33
1.0
31.7
53.2
22.3
NII NORSAT INTL NSATF
0.94
(1.1)
8.0
(6.0)
(5.5)
ORBITAL SCIENCES ORB
5.65
5.2
(1.4)
33.9
QUALCOMM QCOM
32.66
4.1
5.2
(5.6)
(10.3)
RAYTHEON RTN
31.48
0.1
3.7
16.2
2.4
ROCKWELL COLLINS COL
22.34
2.9
7.7
13.7
(4.0)
SCIENTIFIC-ATLANTA SFA
19.85
5.8
26.2
51.2
67.4
TITAN TTN
8.46
5.0
6.5
6.4
(18.7)
TRIMBLE NAVIGATION TRMB
25.22
5.0
7.3
50.6
101.9
VIASAT VSAT
12.23
9.7
19.3
8.5
6.0
Manufacturers’ Average 100.00
2.7
11.9
14.5
14.2
Nasdaq Composite Index COMP
1,574.95
5.7
7.7
17.8
17.9
S & P 500 SP50
949.64
2.8
3.8
12.9
7.9
SN Stock Price Average 100.00
2.2
15.6
18.8
24.5

Wall Street Analysis

By Tom Watts, SG Cowen Securities

With PanAmSat [Nasdaq: SPOT] shares up 27 percent year-to-date, AsiaSat shares up 44 percent, and New Skies Satellites’ [NYSE: NSK] shares up 63 percent, investors are seeing a rebound in the fixed satellite services (FSS) sector. Certainly, the respective management teams at each company have begun painting a rosier picture for the year, although none have been so bold as to say an upturn has actually begun.

The numbers themselves, however, point to an improving business. PanAmSat’s earnings per share (EPS) should rise to 66 cents in 2003 from 57 cents in 2002. New Skies’ EPS should increase to 8 cents a share this year from a 2002 loss of 4 cents. But, much of the earnings increase is coming from cost cutting, not top-line growth. Why then is investor excitement for FSS on the rise? We see three causes.

First, the valuation is compelling. Even with the recent appreciation, PanAmSat and New Skies are trading at only 7.5 times 2002 EBITDA (earnings before interest, taxes, depreciation and amortization). If EBITDA returns to the longer term 8 percent to 10 percent that we expect, a trading multiple of 7.5 times EBITDA seems reasonable, if not modest. The multiple levels prior to this year’s appreciation were downright cheap.

Second, a top-line rebound is likely. Media companies, which are the No. 1 buyers of satellite capacity, already have seen a rebound. The upfront advertising sales for broadcasters rose 15 percent this spring to about $9.3 billion, from $8.3 billion last year. Cable advertising sales could reach $5.6 billion, up 38 percent from last year’s $4.6 billion. These increased dollars can fund new programming formats and the necessary additional satellite capacity to carry them.

Third, high-definition TV could spur growth. After years of delay, HDTV is finally taking off. The major networks increased HDTV offerings by over 50 percent in the last year. Iconocast projects that HDTV households will rise to 33 million by 2006 and that HDTV penetration will reach 80 percent by 2010 – essentially every household that has multichannel television today.

Tom Watts is a managing director and satellite analyst at SG Cowen Securities. He can be reached by phone at 212/278-4260 or by e-mail at tom.watts@sgcowen.com. Readers should assume that SG Cowen Securities and/or its affiliates intend to offer services in investment banking to the above referenced companies within the next three months, and to seek compensation for such services.

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