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Thursday, March 17, 2005

Today's Echostar watch
Posted by Jill | 11:32 AM

There goes my six bucks in settlement money:

EchoStar Communications Corp., on the heels of strong revenue growth in the fourth quarter, disclosed Wednesday that it has found a "significant deficiency" in its internal controls over financial reporting.

According to government filings, the Douglas County-based satellite TV provider said it would not restate previous earnings and is taking steps to fix company procedures.

EchoStar officials would not comment further on the statement triggered last week by a Bloomberg News article alleging illegal transactions with suppliers and questionable consulting payments made by chairman and chief executive Charlie Ergen.

An internal review by EchoStar's audit committee did not name Ergen in its review, but it found "one instance in which one of our executive officers in charge of certain business functions directed the preparation, in prior years, of inaccurate documentation that was used to determine payments made to a vendor."

"No adjustments to our consolidated financial statements were required as a result of the review, and none were made," EchoStar added.

The U.S. Securities and Exchange Commission contacted EchoStar after the Bloomberg report, and the company is cooperating with the inquiry.

A class-action lawsuit filed in response to news of improper accounting was dropped Wednesday.


But here's the thing: The company is still under SEC investigation, and while 4Q earnings were much higher over the same period last year ($0.15 per share from $0.01 per share in the same period a year ago), can we believe the earnings statements?

Meanwhile, at this moment, the stock is up a buck-seventeen, or 4.06% from yesterday, at $30.00. This is about halfway between the 52-week high and low.

Go figure.
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