Hughes Reports Wider Loss in Third Quarter

Hughes Electronics Corp., the biggest U.S. satellite television service, posted a wider third-quarter loss as costs increased.

The loss widened to $227.2 million, from $93.8 million a year earlier, the El Segundo-based owner of the DirecTV satellite service said.

The implied per-share loss was 17 cents a share, compared with 7 cents in the year-earlier quarter. Sales rose 24% to $2.10 billion.

Parent company General Motors Corp. has been trying to sell Hughes to raise money to pay down debt. EchoStar, the second-largest U.S. satellite-TV broadcaster, and Rupert Murdoch’s News Corp. are negotiating to buy Hughes.

EchoStar has lined up banks to lend it $5.5 billion, allowing the second-largest satellite-television broadcaster to sweeten its bid to buy Hughes, according to people familiar with the matter.

UBS Warburg and Deutsche Bank agreed to provide the money, which EchoStar needed to meet General Motors’ request for more than $5 billion in cash, as well as shares, for its unit.

EchoStar, based in Littleton, Colo., initially offered $30 billion in stock and the pledge to assume $1.9 billion in debt.

The loan puts EchoStar in a better position to prevail over a rival offer from News Corp., which hasn’t made public its offer. “The key for GM is they’d like to get in $4 billion to $5 billion in cash,” said Donna Jaegers, analyst for Invesco Telecom Fund, which owns EchoStar shares. “Whoever is the winner will have to come up with that cash.”

Hughes doesn’t report per-share results because the company is a tracking stock of General Motors, Hughes spokesman Richard Dore said.

Hughes’ offer of four free months helped it add more customers than analysts had forecast.

Some investors remain skeptical that growth can continue after management was distracted by takeover talks.

Hughes shares fell 57 cents to close at $14.35 Wednesday on the New York Stock Exchange.

They have fallen 52% in the last year.