UPDATE 2-Hughes loss narrows,raises view on DirecTV results

<a href=reuters.com>Reuters Mon April 14, 2003 12:43 PM ET (Adds analyst quote, details, share price)

NEW YORK, April 14 (Reuters) - Hughes Electronics GMH.N on Monday said its first-quarter loss narrowed and its revenue rose on stronger-than-expected results at its DirecTV unit, the No. 1 U.S. satellite broadcaster.

The improvements led the company, in which Rupert Murdoch's News Corp NCP.AX NWS.N agreed last week to buy a controlling stake, to raise its financial and subscriber estimates for 2003, and suggested to one analyst that consumer spending could be recovering.

"This is the first concrete evidence of strong consumer demand we've been hearing about for communications items ranging from satellite TV and radio and cell phones," Cowen analyst Tom Watts said.

Hughes said its loss narrowed to $50.9 million from $837.7 million last year. The El Segundo, California-based company, which trades as a tracking stock of parent General Motors GM.N , does not report an earnings-per-share figure.

The improvement was primarily due to impairment charges last year related to its now-defunct fast Internet service DirecTV Broadband and DirecTV Latin American, the bankrupt broadcaster in which Hughes has a 75 percent stake.

First-quarter revenue rose 10 percent to $2.23 billion from $2.02 billion last year, compared with a Wall Street consensus of $2.14 billion, from a range of $2.1 billion to $2.18 billion, according to Multex.

Hughes said its earnings before interest tax, depreciation and amortization (EBITDA) rose to $305 million from $164.5 million last year. EBITDA is a measure of cash flow often used to track the performance of media companies as it excludes charges associated with the capital intensive satellite industry.

Analysts polled by tracking company Multex on average expected Hughes to post EBITDA of $208.53 million, in a range of $183.1 million to $242 million.

Hughes said it expects to report revenue of $9.5 billion to $9.6 billion in 2003 compared with its previous estimate of $9.3 billion to $9.5 billion. It also raised its EBITDA estimates to $1.15 billion to $1.2 billion from an earlier forecast of $1.1 billion.

The company raised its 2003 expectation for net new DirecTV subscribers, including customer turnover, to 800,000 to 850,000 from previous estimates of 750,000 to 800,000 subscribers.

DirecTV ended the quarter with a total of 11.4 million subscribers, including rural areas where the broadcaster resells its service.

Excluding its rural resellers, which lost 30,000 subscribers in the quarter, DirecTV signed up 275,000 new subscribers, Hughes said.

DirecTV Latin America, which suffered from regional turmoil including a strike in Venezuela, ended the quarter with 1.5 million subscribers, down 7 percent from the end of the first quarter last year, the company said.

DirecTV's revenue rose 16 percent to $1.7 billion from $1.47 billion last year due to subscriber growth and an increase in average revenue per subscriber (ARPU),Hughes said.

DirecTV's ARPU increased $2.40 to $59.10 in the quarter as more customers bought local channels and premium programming and paid additional fees for multiple set-top boxes.

Hughes shares were up 38 cents, or 3.6 percent, at $10.90 in midday trade on the New York Stock Exchange. This compares to a 52-week high of $17 and a year low of $8.