Digest: Analyst issues EchoStar warning
EmptyCitigroup analyst Jason Bazinet said Tuesday that "there is a significant probability that EchoStar (Communications) will lose the right to sell distant networks to 800,000-1 million subs on Dec. 1" following a Friday court ruling. Unless Congress passes new legislation when it returns to session in mid-November, EchoStar will lose $5 in monthly fees from all distant network subscribers and potential defections to cable operators and DirecTV, according to Bazinet. This would hit financials and also could drag EchoStar shares down 3%-8%, he said.
In reporting earnings Tuesday, telecommunications firm BellSouth Corp. said that nearly 65,000 customers added DirecTV service as a bundled product in the third quarter. This pushed the company's total numbers of DirecTV customers to 756,000. In the year-ago period, BellSouth had added 66,000 DirecTV subscribers to bring its total to more than 460,000.
Omnicom Group Inc., the world's largest advertising conglomerate, posted a stronger-than-expected increase in third-quarter earnings Tuesday. Profit rose 9.5% year-over-year to $177.1 million. Revenue also exceeded expectations, jumping 10% to $2.8 billion, with revenue up 7.8% in the U.S. and 12.7% in international markets.
Ubisoft, Europe's second-largest video game maker, posted a 13% increase in fiscal first-half revenue Tuesday, beating its guidance on stronger-than-expected games sales. Revenue for the six months ending Sept. 30 rose from €153 million a year ago to €172 million ($215.8 million). Second-quarter revenue fell 7% to €102 million, but also exceeded targets. For the full fiscal year, Ubisoft raised its revenue growth estimate from 5%-10% to 8%-12%.