NEW YORK (CNNfn) - Hughes Electronics reported a steep drop in second-quarter earnings Monday and lowered guidance for the third quarter.|
The satellite television provider, in the process of being sold by General Motors Corp., reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $82 million, or about 6 cents per share of its tracking stock. That's down from EBITDA of $179.6 million, or 14 cents a share, a year earlier.
The company said the latest results included $22 million of severance costs. Excluding those costs raises EBITDA to 8 cents a share. Analysts surveyed by earnings tracker First Call expected EBITDA per share of 7 cents, but a member of the First Call research staff said it is too early to say how analysts will treat the severance costs, and thus could not say if the company met or missed estimates by a penny a share.
Hughes said it now expects EBITDA of $90 million to $110 million in the third quarter, which with the current number of shares outstanding would come to EBITDA per share of 7 or 8 cents. Analysts were forecasting 14 cents a share for the third quarter.
The company also lowered its full-year EBITDA guidance to $450 million to $500 million from its previous guidance of $575 million to $650 million, and cut revenue guidance for the year to $8.3 billion from $8.76 billion previously.
Click here for a look at satellite stocks
Shares of Hughes (GMH: down $1.56 to $18.89, Research, Estimates) fell sharply Monday on published reports that Echostar Communications Corp. (DISH: down $0.87 to $28.51, Research, Estimates) had dropped out of bidding for its DirecTV operations, leaving only News Corp. (NWS: up $0.79 to $37.11, Research, Estimates) bidding for the prized assets.