The Satellite News Finanical Ticker

By | June 23, 2003 | Feature

Week of June 13 – 19, 2003
Perentage Change

Symbol
June 19
One Week
One Month
Three Month
Year to Date
Operators
APT SATELLITE HLDGS ATS
2.68
44.9
61.4
74.0
55.8
ASIASAT TELECOM SAT
16.74
3.3
15.1
31.3
47.0
BRITISH SKY BROADCASTING BSY
46.80
0.2
6.2
20.8
16.8
ECHOSTAR COMM -CL A DISH
35.02
(0.9)
11.9
16.5
57.3
HUGHES ELEC (GM -CL H) GMH
13.17
2.3
2.5
29.0
23.1
LORAL SPACE & COMM LOR
3.22
(8.0)
(21.5)
(8.0)
(25.1)
NEWS CORP NWS
31.35
(2.1)
4.6
24.9
19.4
NEW SKIES SATELLITES NSK
5.92
(0.5)
(10.3)
46.2
42.7
PANAMSAT SPOT
18.53
(3.9)
3.1
26.2
26.6
PASIFIK SATELIT NUSANTARA PSNRY
0.09
(45.2)
(32.0)
(43.3)
PEGASUS COMMUNICATIONS PGTV
27.57
1.9
(7.6)
74.9
110.5
rSTAR CORP RSTRC
0.58
(3.3)
26.1
65.7
141.7
SES GLOBAL SES.LU
5.95
4.4
12.3
41.7
(7.0)
SIRIUS SATELLITE RADIO SIRI
1.80
(12.2)
31.4
300.0
181.3
XM SATELLITE RADIO XMSR
10.75
(5.0)
6.9
138.4
299.6
Operators’ Average 100.00
1.4
6.5
56.6
63.1
Manufacturers
ANDREW ANDW
9.88
1.5
1.9
63.8
(3.9)
BALL BLL
47.22
(3.0)
(11.6)
(12.6)
(7.8)
BOEING BA
35.50
0.3
16.7
27.6
7.6
COM DEV INTL CDV
0.54
20.0
10.2
(10.0)
EMS TECHNOLOGIES ELMG
13.56
2.2
12.7
(8.8)
(12.9)
GARMEN LTD. GRMN
44.14
(11.3)
(8.8)
26.4
50.6
GILAT SAT NETWORKS GILTF
4.65
22.4
8.9
1.1
(40.4)
GLOBECOM GCOM
3.55
6.6
22.4
51.1
(5.3)
HARRIS HRS
32.25
3.3
9.8
13.4
22.6
HONEYWELL HON
28.05
1.0
12.7
17.9
16.9
KVH KVHI
22.91
0.5
21.0
129.1
166.4
LOCKHEED MARTIN LMT
49.16
2.2
0.3
3.9
(14.9)
LUCENT TECHNOLOGIES LU
2.11
(5.8)
(10.6)
31.1
67.5
MOTOROLA MOT
9.62
8.7
8.1
10.7
11.2
NERA NERAY
1.54
(2.8)
15.1
73.6
42.5
ORBITAL SCIENCES ORB
7.65
18.6
36.6
35.6
81.3
QUALCOMM QCOM
36.92
9.8
21.8
(5.9)
1.5
RAYTHEON RTN
32.41
0.6
0.2
15.1
5.4
ROCKWELL COLLINS COL
23.73
1.5
2.2
22.3
2.0
SCIENTIFIC-ATLANTA SFA
24.89
13.8
22.7
91.9
109.9
SKY FRAMES SKYU
1.90
49.6
18.8
(76.3)
STM WIRELESS STMI
0.01
(80.0)
(50.0)
400.0
(97.5)
TITAN TTN
10.35
22.5
32.0
(0.5)
TRIMBLE NAVIGATION TRMB
25.65
(1.5)
6.6
48.8
105.4
VIASAT VSAT
14.20
7.2
21.0
13.6
23.1
Manufacturers’ Average 100.00
(0.2)
10.1
44.4
17.8
Nasdaq Composite Index
S & P 500 COMP
1,648.64
0.2
7.2
17.7
23.4
SN Stock Price Average SP50
994.70
(0.3)
5.3
14.8
13.1
100.00
0.4
8.7
49.0
34.8

Wall Street Analysis

By Tom Watts, SG Cowen Securities

Washington has now begun its scrutiny of the proposed News Corp [NYSE: NSK] acquisition of General Motors’ [NYSE: GM] stake in Hughes Electronics [NYSE: GMH] and its U.S. satellite TV unit, DirecTV. Senators on the antitrust subcommittee grilled News Corp’s Rupert Murdoch and DirecTV’s Eddy Hartenstein, while comments from EchoStar Communications [Nasdaq: DISH] and others flowed into the Federal Communications Commission. While few favor the deal, we believe it is headed for regulatory approval, subject to conditions.

Murdoch already has agreed to abide by the rules for vertical integration of programmers and programming distributors that had been designed for integrated cable programmer/operators such as AOL Time Warner [NYSE: AOL]. These rules ensure that all distributors would have access to programming by News Corp and its Fox operations on favorable terms. However, no safeguards currently exist for pricing.

News Corp/Fox has the incentive to raise the price of its programming to all distributors including DirecTV, EchoStar, and cable operators. For example, if Fox raised the price of Fox News by $1 per month, Fox would receive the additional $1 across all 90 million multichannel households and possibly collect $90 million more in monthly programming revenue. The increased expense incurred by DirecTV would only be $1 times its 11.4 million households, or $11.4 million per month. News Corp’s pro rata 34 percent share of the cost would be only $3.88 million per month, leading to a net gain of $86 million per month. The math shows a net gain of 86/90 or roughly 96 cents for every $1.00 of price increase. Fox would be hard pressed to resist this potential windfall.

You might say the cable operators could refuse any price increase, just as they can do now. However, with News Corp controlling DirecTV’s nationwide platform, it would be in a unique position as a national content distributor to retaliate against holdout cable companies. In contrast, previous vertically integrated cable programmer/ operators only operated in selected markets, so they lacked the national market clout of a News Corp/DirecTV combination.

Look for special conditions before regulators give the go-ahead.

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 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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