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Tivo Lawsuit Cuts Into Echostar First Quarter Profits
Echostar Communications Corp.‘s first quarter profit was nearly cut in half, hampered in part by a charge related to a lawsuit from Tivo Inc. over digital video recorder technology, Echostar announced May 11.
Echostar, which operates the Dish Network, reported net income of $147 million for the quarter ended March 31, down from a profit of $318 million in the same period in 2005, which was boosted by a $134 million insurance gain. Earnings in the first quarter of 2006 were cut by a $74 million charge related to the technology patent case.
In February, a jury in Texas ruled that Echostar infringed on a Tivo patent for digital video recording devices and awarded Tivo more than $73 million to cover lost profits and royalties. Tivo has said it will seek a permanent injunction against Echostar over the technology, while an Echostar countersuit is scheduled to begin in February 2007.
Echostar’s revenue improved 13 percent, from $2 billion in the first quarter of 2005 to $2.3 billion in the most recent three months. Dish added about 225,000 net new subscribers during the first quarter of 2006, ending the quarter with nearly 12.3 million subscribers.
Operating expenses rose from $1.7 billion a year ago to $2 billion in the first quarter of 2006.
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