Hughes hits a hump
DirecTV parent's shares fall to 52-week low
Hughes shares, which rep a tracking stock of parent company General Motors, fell $1.59, or 8%, to $18.86. The stock has shed 43% of its value over the past year.
Lately, Hughes' Wall Street woes involve a share-battering combo of downbeat financial news -- the lowered revenue projections were expected -- and the prospect that a stock slide will hurt chances of DirecTV's fetching a top sales price.
GM and Hughes execs have been negotiating for most of the past year with News Corp. topper Rupert Murdoch over his proposed acquisition of DirecTV and perhaps other Hughes assets. Satcasting rival EchoStar has been another notable DirecTV suitor, but the latest speculation has EchoStar topper Charlie Ergen bowing out of the fray.
That would leave Murdoch freer rein to finally nail down a deal, and news Monday that DirecTV will add 200,000 fewer subs than expected this year could help him wrap things on easier terms than might have been possible earlier.
Meanwhile, if DirecTV is still projected to add 1.1 million customers this year, Hughes' satellite operations unit PanAmSat reported a decline in broadcasters' purchases of space on its 21 orbiting birds in the second quarter.
Hughes' bottom line sagged more deeply as a result, with the El Segundo, Calif.-based company posting a $156.5 million loss in the latest quarter. That compared with $69.1 million in red ink the same period a year ago.
Overall, Hughes second-quarter sales rose 8% to $1.99 billion.
CEO exec Jack Shaw, who complained soon after being appointed seven weeks ago that the protracted negotiations have too greatly preoccupied Hughes management, hinted at a possible corporate restructuring in remarking on the disappointing financial results.
"My No. 1 operational objective is to get the company back on track and meet or exceed (the adjusted) financial commitments," Shaw said. "In the coming weeks, we will be sharing with you the specific operational and structural changes that will enable us to meet this objective."
(Bloomberg News contributed to this report.)
