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The Satellite News Financial Ticker

By | October 20, 2003

      Week of Oct. 10 – 16, 2003
      Percentage Change
      Symbol
      Oct. 16 Price
      One Week
      One Month
      Three Month
      Year to Date
      Operators
      APT SATELLITE HLDGS ATS
      2.16
      3.3
      (7.3)
      (46.5)
      25.6
      ASIASAT TELECOM SAT
      16.05
      5.6
      (0.5)
      (5.9)
      40.9
      BRITISH SKY BROADCASTING BSY
      43.16
      5.0
      4.7
      (4.1)
      7.7
      ECHOSTAR COMM -CL A DISH
      39.92
      (0.7)
      7.4
      7.1
      79.3
      HUGHES ELEC (GM -CL H) GMH
      15.45
      2.9
      7.1
      12.0
      44.4
      LORAL SPACE & COMM LOR
      0.40
      53.8
      66.7
      (86.7)
      (90.7)
      NEWS CORP NWS
      34.59
      3.2
      3.7
      12.2
      31.8
      NEW SKIES SATELLITES NSK
      5.83
      (0.3)
      5.6
      6.2
      40.5
      PANAMSAT SPOT
      19.00
      24.4
      27.4
      3.3
      29.8
      PASIFIK SATELIT NUSANTARA PSNRY
      0.08
      (56.8)
      (51.5)
      (44.8)
      (46.7)
      PEGASUS COMMUNICATIONS PGTV
      13.94
      (2.1)
      (4.1)
      (57.7)
      6.4
      rSTAR CORP RSTRC
      0.62
      1.6
      (11.4)
      14.8
      158.3
      SES GLOBAL SESF.LU
      7.55
      14.7
      20.8
      32.5
      18.0
      SIRIUS SATELLITE RADIO SIRI
      2.37
      21.5
      40.2
      33.4
      270.3
      XM SATELLITE RADIO XMSR
      20.31
      18.8
      24.0
      54.6
      655.0
      Operators’ Average
      100.00
      6.3
      8.9
      (4.6)
      84.7
      Manufacturers
      ANDREW ANDW
      13.43
      2.1
      (3.2)
      16.9
      30.6
      BALL BLL
      56.10
      (0.2)
      5.2
      31.8
      9.6
      BOEING BA
      37.45
      3.2
      5.5
      12.0
      13.5
      COM DEV INTL CDV.TO
      2.70
      27.4
      36.4
      92.9
      172.7
      EMS TECHNOLOGIES ELMG
      19.09
      8.7
      8.3
      20.1
      22.6
      GARMIN LTD. GRMN
      44.75
      0.3
      6.4
      5.8
      52.7
      GILAT SAT NETWORKS GILTF
      4.65
      (12.6)
      4.5
      (26.7)
      (40.4)
      GLOBECOM GCOM
      4.05
      (6.3)
      (5.8)
      (0.5)
      8.0
      HARRIS HRS
      36.11
      (0.1)
      6.2
      18.0
      37.3
      HONEYWELL HON
      29.60
      7.3
      4.7
      6.2
      23.3
      KVH KVHI
      27.25
      (5.1)
      (5.2)
      15.1
      216.9
      LOCKHEED MARTIN LMT
      45.73
      (0.3)
      (10.3)
      (7.2)
      (20.8)
      LUCENT TECHNOLOGIES LU
      2.35
      2.6
      4.0
      22.4
      86.5
      MOTOROLA MOT
      13.70
      0.2
      28.0
      40.1
      58.4
      NERA NERAY
      2.31
      5.3
      0.7
      36.0
      113.3
      ORBITAL SCIENCES ORB
      9.98
      4.4
      5.6
      22.9
      136.5
      QUALCOMM QCOM
      44.87
      3.7
      3.3
      18.7
      23.3
      RAYTHEON RTN
      28.11
      2.1
      (10.2)
      (13.1)
      (8.6)
      ROCKWELL COLLINS COL
      26.78
      3.8
      6.4
      4.2
      15.1
      SCIENTIFIC-ATLANTA SFA
      36.65
      8.1
      11.2
      41.0
      209.0
      SKY FRAMES SKYU
      0.95
      (6.9)
      (17.4)
      (35.6)
      (88.1)
      STM WIRELESS STMI
      0.01
      150.0
      (20.0)
      (95.0)
      TITAN TTN
      21.00
      (0.1)
      23.8
      85.8
      101.9
      TRIMBLE NAVIGATION TRMB
      23.43
      (0.6)
      (11.0)
      (10.4)
      87.6
      VIASAT VSAT
      20.22
      (5.6)
      24.4
      38.8
      75.2
      Manufacturers’ Average
      100.00
      1.7
      10.9
      16.6
      49.7
      Nasdaq Composite Index COMP
      1,950.14
      3.0
      5.7
      11.2
      46.0
      S & P 500 SP50
      1,050.07
      1.6
      3.5
      5.0
      19.4
      SN Stock Price Average
      100.00
      3.4
      10.1
      8.6
      62.8

      Wall Street Analysis

      By Tom Watts, SG Cowen Securities

      Since PanAmSat [Nasdaq: SPOT] reported third quarter results last week, its stock has risen 19 percent from $16 to nearly $19. We believe two factors have driven the rise: 1) investors re-focusing on its fundamentals, and 2) EchoStar Communications’ [Nasdaq: DISH] bid for the North American satellite assets of Loral Space and Communications. The bid for the Loral fleet, which competes directly with PanAmSat’s North American satellites, highlights PanAmSat’s intrinsic value.

      On fundamentals, PanAmSat offers three compelling characteristics. First is valuation. It trades at only 6.6x our 2004E free cash flow per share of $2.82. Second is sectoral. The fixed satellite services (FSS) sector where PanAmSat competes appears to be bottoming after several tough years. Consensus holds that an upturn should be visible by mid-2004. Third is strategic. News Corp [NYSE: NWS] seems poised to dress up and sell PanAmSat during the next two years. Remember, News Corp is purchasing 34 percent of Hughes Electronics [NYSE: GMH], which holds 81 percent of PanAmSat’s stock. News Corp is likely to take a series of steps to boost PanAmSat results over the coming quarters.

      Of course, PanAmSat also has warts. Otherwise, the stock wouldn’t trade at only 6.6x cash flow. PanAmSat detractors argue that the FSS upturn will never come since advanced compression could mute the demand surge expected from high-definition TV. Detractors also point to how much of PanAmSat’s recent growth came from its March acquisition of Hughes’ defense satellite business. In the third quarter, defense contributed $21 million in revenue. Without this gain, PanAmSat’s third quarter revenue would have dipped 5 percent year- over-year. We expect further acquisitions in 2004 to boost both revenue and EBITDA results.

      EchoStar’s bid last week for Loral’s North American satellites, slightly above Intelsat’s $1 billion bid, forced an auction that is scheduled to begin Oct. 20. The $1 billion level, presumably the price where bidding will start, represents about 7.5x 2003 EBITDA for the Loral satellites. As bidding proceeds, the price paid for Loral’s assets will provide an indication of PanAmSat’s inherent value.

      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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