EchoStar [DISH] reported a small 4Q profit, chalking up gains to vigorous sub additions, but the Street was nonplussed as shares dipped 4.3% Fri morning. Though the company reversed its fortunes with a net income of $3mln (vs a loss of $716mln), Charlie Ergen says EchoStar must increase spending to counteract churn, expected to rise in reaction to its Viacom blackout. "Any time you take CBS off the air for 48 hours you’re going to have a negative impact, at least in the short term," Ergen says. Beyond customer dissatisfaction at missing "Survivor," the $1 credits issued in the wake of the service interruption will influence ARPU. At market close, shares stabilized at $33.70, down 2.71%. EchoStar’s 4Q results were "underwhelming" and "lackluster," Oppenheimer says, suggesting performance was hampered by an "increasingly competitive subscription TV environment." That environment will heat up even more, which in turn should cause "DISH’s trading premium to continue to decline through ’04," it says.

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