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The Satellite News Financial Ticker

By Staff Writer | June 16, 2003

      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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