EchoStar Corporation (SATS) shares took a hit on Tuesday after the company revealed a third-quarter loss that fell short of analyst estimates. The company reported a loss per share of 52 cents, missing the anticipated loss of 37 cents. Quarterly revenue also came in lower than expected, reaching $3.890 billion, a 5.3% year-over-year decline compared to the projected $3.909 billion.
Despite the disappointing financial results, EchoStar saw growth in its Sling TV streaming service, adding 145,000 subscribers during the quarter. However, the company experienced a net decline in Pay-TV subscribers, losing approximately 43,000 subscribers. This resulted in a total of 8.03 million Pay-TV subscribers, including 5.89 million DISH TV subscribers and 2.14 million Sling TV subscribers.
EchoStar highlighted its focus on retaining and acquiring profitable customers, strengthening its consumer offerings, and bolstering its nationwide Open RAN 5G network. The company also announced a series of strategic transactions aimed at disrupting the wireless and pay-TV industries. Notably, EchoStar recently agreed to sell its pay-TV business to DIRECTV, pending the successful completion of regulatory approvals and other closing conditions.
In the broadband satellite segment, EchoStar ended the third quarter with 912,000 subscribers, representing a loss of approximately 43,000 during the quarter. This decrease was somewhat smaller than the 59,000 subscriber loss experienced in the same period last year, attributed to the launch of the new EchoStar XXIV satellite and increased demand for new service plans. However, the third quarter was affected by the end of the ACP program funding on June 1.
EchoStar concluded the quarter with a strong financial position, holding $2.8 billion in cash and equivalents and $441.68 million in inventory. The company’s long-term debt, finance lease, and other obligations, net of the current portion, totaled $21.557 billion. To address its upcoming debt maturity, EchoStar secured financing and entered into an agreement with a group of its convertible note holders, securing approximately $5.2 billion in additional financing and extending the payment terms for the tendered convertible notes.
Despite the recent challenges, EchoStar remains focused on its strategic initiatives to drive growth and innovation in the telecommunications and entertainment industries. The company’s ongoing commitment to strengthening its offerings and expanding its 5G network positions it for potential future success.
