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The Satellite News Financial Ticker

By | June 2, 2003

      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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