The Satellite News Financial Ticker

By | June 16, 2003 | Feature

Week of June 6 – 12, 2003
Percentage Change

Symbol
June 12 Price
One Week
One Month
Three Month
Year to Date
Operators
APT SATELLITE HLDGS ATS
1.80
(13.5)
19.2
24.1
4.7
ASIASAT TELECOM SAT
16.00
(3.3)
13.5
37.2
40.5
BRITISH SKY BROADCASTING BSY
44.80
2.3
3.2
18.7
11.8
ECHOSTAR COMM -CL A DISH
36.01
5.9
8.2
26.4
61.8
HUGHES ELEC (GM -CL H) GMH
13.10
7.3
5.0
35.9
22.4
LORAL SPACE & COMM LOR
0.35
(10.3)
(12.5)
12.9
(18.6)
NEWS CORP NWS
31.80
0.6
9.5
39.2
21.1
NEW SKIES SATELLITES NSK
5.90
(2.5)
8.3
45.3
42.2
PANAMSAT SPOT
19.24
(2.4)
5.9
49.7
31.4
PASIFIK SATELIT NUSANTARA PSNRY
0.09
(45.2)
(46.9)
(43.3)
PEGASUS COMMUNICATIONS PGTV
28.04
3.8
(10.5)
88.2
114.0
rSTAR CORP RSTRC
0.64
6.7
100.0
166.7
SES GLOBAL SES.LU
5.80
9.2
13.5
48.0
(9.4)
SIRIUS SATELLITE RADIO SIRI
2.01
(3.8)
107.2
346.7
214.1
XM SATELLITE RADIO XMSR
11.31
(13.0)
18.2
173.9
320.4
Operators’ Average
100.00
(0.9)
9.6
66.6
65.3
Manufacturers
ANDREW ANDW
10.00
2.6
6.3
35.7
(2.7)
BALL BLL
49.10
3.5
(12.3)
(2.0)
(4.1)
BOEING BA
35.75
6.6
22.9
41.8
8.4
COM DEV INTL CDV
0.53
6.0
35.9
1.0
(11.7)
EMS TECHNOLOGIES ELMG
13.00
(4.8)
10.4
0.4
(16.5)
GARMEN LTD. GRMN
50.20
2.2
9.4
57.1
71.3
GILAT SAT NETWORKS GILTF
3.75
(5.3)
(13.2)
(33.0)
(51.9)
GLOBECOM GCOM
3.23
1.2
11.8
11.3
(13.9)
HARRIS HRS
31.36
1.5
6.6
17.9
19.2
HONEYWELL HON
27.91
2.5
15.4
33.6
16.3
KVH KVHI
23.00
10.9
31.4
129.3
167.4
LOCKHEED MARTIN LMT
48.42
5.7
(0.9)
17.7
(16.2)
LUCENT TECHNOLOGIES LU
2.22
3.3
40.5
76.2
MOTOROLA MOT
9.05
1.0
13.6
13.4
4.6
NERA NERAY
1.59
8.6
32.7
93.1
46.5
ORBITAL SCIENCES ORB
6.96
11.2
19.6
20.4
64.9
QUALCOMM QCOM
33.59
(3.2)
8.0
(2.7)
(7.7)
RAYTHEON RTN
32.34
1.3
6.0
31.7
5.2
ROCKWELL COLLINS COL
23.80
1.8
6.3
36.1
2.3
SCIENTIFIC-ATLANTA SFA
23.10
9.1
46.8
94.8
94.8
SKY FRAMES SKYU
1.95
(11.4)
41.3
7.1
(75.6)
STM WIRELESS STMI
0.01
100.0
(20.0)
900.0
(95.0)
TITAN TTN
10.75
22.3
16.1
46.9
3.4
TRIMBLE NAVIGATION TRMB
26.03
(0.8)
9.0
68.0
108.4
VIASAT VSAT
13.93
3.1
16.5
27.8
20.7
Manufacturers’ Average
100.00
7.0
12.9
67.5
16.6
Nasdaq Composite Index
S & P 500 COMP
1,653.62
1.2
8.8
30.1
23.8
SN Stock Price Average SP50
998.51
1.2
7.0
24.7
13.5
100.00
4.1
11.6
67.2
34.9

Wall Street Analysis

By Tom Watts, SG Cowen Securities

So, how many Oklahomans would rather watch ABC programming on ABC’s Los Angeles affiliate than on the network’s affiliate in Tulsa? I can understand wanting to see sunny beaches, maybe some Lakers games. But, ABC believes that a lot of Sooners are tuning into LA, or other markets, reducing the ratings and ad revenue for their hometown stations.

That concern played a central role in the network’s legal case against EchoStar Communications [Nasdaq: DISH] that was decided this week. Federal Judge Dimitrouleas ordered EchoStar to “requalify” all its customers receiving distant network signals to show they were outside the markets of any local network affiliates. The judge gave EchoStar until Aug. 11 to shut off any distant network signals for customers who can receive a local network signal over the air.

On one hand, this may hurt EchoStar slightly. Those Lakers fans in Oklahoma may get so angry, they will drop EchoStar and cause churn to spike during the third and fourth quarters. At most, we expect a few hundred thousand subscribers to cancel their service. (Of course, the Lakers fans could also pay $149 for the NBA League Pass from EchoStar, but $1.50 per month for one affiliate is a whole lot cheaper.)

On the other hand, with this case behind EchoStar, we expect investors to refocus on the company’s rising cash flow and earnings. We project free cash flow (FCF) per share to rise 60 percent from $1.06 this year to $1.70 in 2004. EchoStar is trading at only 21 times 2004 estimated FCF per share and has 4.8 percent FCF yield.

We see upside for both FCF and earnings per share (EPS) if EchoStar elects to reduce debt. The company’s $2.5 billion in cash and marketable securities could retire some of its highest interest debt with coupons of 9 1/8 percent to 10 3/8 percent.

We currently project EchoStar’s EPS to rise 84 percent from $0.67 in 2003 to $1.23 in 2004. With debt retirements, EchoStar’s estimated current price to earnings ratio of 29 times for 2004 could fall substantially. This could make EchoStar one of the first multi-channel video companies to trade on earnings.

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 . Readers should assume that SG Cowen Securities Corp. 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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