Globex Corporation Newsletter

From the Wall Street Journal:

[Nameless Company] Communications Inc., the country's No. 2 satellite TV provider, posted a 15% rise in fourth-quarter net income, driven by better-than-expected subscriber growth and a 17% revenue increase.

The Englewood, Colo. company added about 350,000 net new subscribers during the December quarter, more than many analysts expected. [Nameless Company] ended the year with 13.11 million subscribers, up 1.07 million subscribers from 2005.

Like its rival, DirecTV Group Inc., [Nameless Company] has deliberately tightened credit policies for more than a year. This has helped improve profitability but slowed subscriber growth. Subscriber growth appeared weak through most of 2006 because of the credit policies. Subscriber growth was also expected to be slowed a bit in the quarter because the company lost a court battle over its carriage of "distant signals" that forced it to pull ABC, CBS, NBC and Fox stations in an estimated 800,000 to 900,000 customers throughout the country.

Despite the issues during the quarter, [Nameless Company] ended up adding more subscribers than rival DirecTV, which added 275,000 net new subscribers during the quarter.

The fourth quarter "marked the fourth time in the past five quarters that [Nameless Company] outperformed DirecTV in net additions," Cowen analyst Tom Watts wrote in a note. Mr. Watts had anticipated 270,000 net additions during the quarter.

[Nameless Company] earned $153 million, or 35 cents a share, in the fourth quarter, up from $133 million, or 30 cents a share, a year earlier. Revenue rose 17% to $2.58 billion from $2.2 billion a year ago.

Fourth-quarter results "paint a picture of a company that is rolling along nicely, thank you very much," Craig Moffett, analyst at Sanford Bernstein, wrote in a note.

Despite the better-than-expected subscriber figures, Mr. Moffett noted that some concerns lurk in the numbers. Profit margins were weak with gross margins at the lowest level since 2004. Also, subscriber acquisition costs, at $704 per subscriber, were higher than expected, he said.

Satellite companies have faced pressure from cable companies in the past year as customers are lured away by cable providers' popular "triple play" bundle of TV, Internet and phone services. This has been a challenge because satellite companies aren't able to offer competing bundles without the help of a partner.

[Nameless Company] is also embroiled in numerous legal battles. Among them, the company's patent case with TiVo Inc. doesn't seem to be letting up any time soon after a federal appeals court decided in October to let [Nameless Company] continue offering its digital video recorder service while it appeals an earlier jury ruling that it had infringed on TiVo's patent.

As employees, we were tasked with reaching the the 13 Million level by the first of this year. We acheived that and were each given $250 and a day off.

On March 1st, our insurance deductable went up to $1250.

I have Multiple Sclerosis.

BOJ

The preceeding is my own work (except when attributed otherwise) and does not nor is it intended to reflect the opinions or practices of [Nameless Company].