EchoStar Q4 Profit Declines - Update

(RTTNews) - Satellite services provider EchoStar Corp. (SATS), Friday reported a drop in profit for the fourth quarter, despite a growth in revenues, dragging its shares down seven percent in current trade on the Nasdaq.

Englewood, Colorado-based EchoStar's fourth-quarter profit dropped to $4.5 million or $0.05 per share from $26.2 million or $0.28 per share a year ago.

On average, five analysts polled by Thomson Reuters expected the company report a loss of $0.09 per share for the quarter. Analysts' estimates typically exclude special items.

For the recent fourth quarter, the company recorded an interest income and gains of $7.8 million and a goodwill impairment charge of $3.8 million. While last year, EchoStar's results included a special dividend from a strategic investment of $28.5 million an impairment charges of goodwill and intangible assets of $32.8 million.

Fourth-quarter revenues of EchoStar grew to $808 million from $786 million last year. Three analysts estimated revenues of $819.66 million for the quarter.

EchoStar also said it reached a strategic deal with Dish Network Corp. (DISH), in which EchoStar will get five satellites and about $11 million in cash from Dish.

In exchange, Dish will get two issues of preferred tracking stock, which will track the residential retail satellite business of EchoStar's unit Hughes Network Systems. The Preferred Tracking Stock represents 80 percent of the economic value of Hughes Network Systems.

EchoStar expects to generate about $145 million of incremental revenue from the new satellites in 2014.

EchoStar was spun out of Dish Network in 2008.

SATS is currently trading at $44.48, down $3.43 or 7.16%, on a volume of 0.6 million shares, above the three-month average volume.