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The Satellite News Financial Ticker

By Staff Writer | August 18, 2003

      Week of Aug. 8 – 14, 2003
      Percentage Change

      Symbol
      Aug. 14 Price
      One Week
      One Month
      Three Month
      Year to Date
      Operators
      APT SATELLITE HLDGS ATS
      2.65
      0.8
      (30.1)
      58.7
      54.1
      ASIASAT TELECOM SAT
      17.00
      1.6
      0.4
      17.2
      49.3
      BRITISH SKY BROADCASTING BSY
      45.52
      0.9
      0.7
      2.2
      13.6
      ECHOSTAR COMM -CL A DISH
      35.59
      (0.4)
      (2.7)
      11.4
      59.9
      HUGHES ELEC (GM -CL H) GMH
      13.72
      2.0
      1.3
      10.2
      28.2
      LORAL SPACE & COMM LOR
      0.22
      –
      (92.8)
      (95.3)
      (94.9)
      NEWS CORP NWS
      32.59
      7.6
      4.9
      7.4
      24.2
      NEW SKIES SATELLITES NSK
      5.78
      4.5
      12.5
      5.5
      39.3
      PANAMSAT SPOT
      16.36
      0.9
      (13.6)
      (10.2)
      11.7
      PASIFIK SATELIT NUSANTARA PSNRY
      0.07
      (54.8)
      (53.3)
      (54.8)
      (53.3)
      PEGASUS COMMUNICATIONS PGTV
      20.95
      (39.8)
      (35.7)
      (30.8)
      59.9
      rSTAR CORP RSTRC
      0.92
      50.8
      67.3
      80.4
      283.3
      SES GLOBAL SES.LU
      6.20
      1.6
      8.8
      23.5
      (3.1)
      SIRIUS SATELLITE RADIO SIRI
      1.65
      (3.5)
      (9.3)
      34.1
      157.8
      XM SATELLITE RADIO XMSR
      13.00
      (2.0)
      (2.5)
      27.1
      383.3
      Operators’ Average
      100.00
      (2.0)
      (9.6)
      5.8
      67.5
      Manufacturers
      ANDREW ANDW
      10.64
      6.8
      (6.5)
      10.3
      3.5
      BALL BLL
      50.08
      3.3
      13.8
      (7.6)
      (2.2)
      BOEING BA
      32.98
      3.4
      (6.3)
      11.6
      (0.0)
      COM DEV INTL CDV
      0.47
      6.8
      (3.1)
      17.5
      (21.7)
      EMS TECHNOLOGIES ELMG
      17.50
      6.5
      11.5
      48.1
      12.4
      GARMEN LTD. GRMN
      38.34
      4.6
      (10.4)
      (19.9)
      30.9
      GILAT SAT NETWORKS GILTF
      4.36
      (0.2)
      (31.3)
      (0.9)
      (44.1)
      GLOBECOM GCOM
      3.66
      (1.6)
      (8.0)
      27.6
      (2.4)
      HARRIS HRS
      31.28
      1.2
      2.9
      6.8
      18.9
      HONEYWELL HON
      28.47
      3.1
      3.3
      15.0
      18.6
      KVH KVHI
      22.14
      25.7
      (2.7)
      31.4
      157.4
      LOCKHEED MARTIN LMT
      50.49
      (0.8)
      2.2
      1.9
      (12.6)
      LUCENT TECHNOLOGIES LU
      1.82
      5.2
      (9.5)
      (15.3)
      44.4
      MOTOROLA MOT
      9.62
      3.6
      1.2
      19.5
      11.2
      NERA NERAY
      2.10
      (2.7)
      37.7
      73.2
      93.7
      ORBITAL SCIENCES ORB
      8.25
      2.1
      5.8
      38.9
      95.5
      QUALCOMM QCOM
      38.38
      5.2
      (0.7)
      22.3
      5.5
      RAYTHEON RTN
      31.11
      2.7
      (4.5)
      (1.8)
      1.2
      ROCKWELL COLLINS COL
      25.98
      1.6
      2.9
      15.5
      11.7
      SCIENTIFIC-ATLANTA SFA
      29.99
      7.3
      17.0
      66.2
      152.9
      SKY FRAMES SKYU
      1.20
      33.3
      (29.4)
      (7.7)
      (85.0)
      STM WIRELESS STMI
      0.00
      (63.6)
      (84.0)
      (80.0)
      (99.0)
      TITAN TTN
      15.43
      2.0
      39.1
      75.5
      48.4
      TRIMBLE NAVIGATION TRMB
      26.05
      3.6
      (2.2)
      8.8
      108.6
      VIASAT VSAT
      15.00
      14.5
      2.9
      25.0
      30.0
      Manufacturers’ Average
      100.00
      2.9
      (2.3)
      15.3
      23.1
      Nasdaq Composite Index COMP
      1,700.34
      2.9
      (1.9)
      10.4
      27.3
      S & P 500 SP50
      990.51
      2.4
      (0.8)
      5.1
      12.6
      SN Stock Price Average
      100.00
      1.1
      (5.1)
      11.7
      39.8

      Stock Analysis

      By Paul Dykewicz

      New Skies Satellites [NYSE: NSK] is showing that a niche satellite operator that is well-capitalized and has only a modest amount of debt can survive an industry-wide downturn. In many industries, weak economic conditions force small players to merge or scramble in other ways to remain viable. New Skies not only has avoided those dubious fates, but it is on track to generate positive free cash flow for 2003.

      The feat is even more impressive when the company’s utilization rate of only 50 percent is considered. In good times when demand is strong, global satellite operators typically attain utilization rates above 70 percent. With New Skies recently launching the NSS-6 and NSS-7 satellites, the company’s utilization rate is lower. Robert Peck, the satellite analyst at Bear Stearns, noted, however, that the overall utilization rate for New Skies topped 70 percent for all of the company’s other satellites.

      Another positive sign for New Skies is that it was able to secure new contracts during the latest quarter. The flow of new business to the company shows that the user community has confidence in the company’s staying power.

      The company’s management also openly acknowledged that further pricing pressure could occur in the second half of this year. With that in mind, New Skies CEO Dan Goldberg instituted cost controls at the company that won praise from both Peck and TomWatts, the satellite analyst at SG Cowen. To further aid the cash position at New Skies, the company reduced its capital expenditures to heighten its free cash flow. Peck, in particular, highlighted that move.

      Investors also can take heart from the company’s 97 percent completion of its stock repurchase program. At some companies, the repurchase of its own shares can be a ploy to convince investors that management has confidence that a stock’s value will rise when the cold marketplace reality may suggest otherwise. In the case of New Skies, the company’s stock price is undervalued compared to its larger global satellite operating peers. For that reason, the rationale of New Skies’ management appears sound. The larger satellite operators offer economies of scale that warrant higher valuations by investors, but the current gap is too high, Peck concluded.

      Another plus for New Skies in overcoming challenging market conditions is that it generates revenue from a diverse base of regions and services. That situation helps the company to spread its risks and avoid dependence on any particular region or service sector for its continued profitability.

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