Dish Network Narrows 2Q Profit by 33% as Cost Grow

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Published August 08, 2012

| FOXBusiness

Dish Network (DISH) revealed a worse-than-expected 33% decline in second-quarter profit on Wednesday as the company continued to lose customers and spent more money trying to acquire new ones.

The Englewood, Colo.-based pay-television provider reported net income of $226 million, or 50 cents a share, compared with a year-earlier $335 million, or 75 cents, below average analyst estimates of 68 cents in a Thomson Reuters poll.

Dish attributed part of the decline to the loss of the 148-degree orbital slot license in the quarter, which hurt income by $43 million, as well as higher subscriber-related expenses from an increase in programming costs and customer acquisition expenses.

Subscriber acquisition advertising rose by 75% year-over-year to $118 million.

“In the face of a difficult economy and stiff competition, a disciplined approach to subscriber acquisition and retention is paying off," Dish CEO Joseph Clayton said in a statement.

Revenue for the three months ended June 30 fell 0.6% to $3.57 billion, while expenses climbed 9% to $3.1 billion. Dish said net subscribers fell by 10,000 during the quarter, brining total subscribers at the end of the period to 14.06 million.

That's an improvement from a loss of 135,000 subscribers last year and far better than the 52,000 customers rival DirecTV (DTV) lost in its second quarter.

The second-largest U.S. satellite television provider said the launch of the Hopper Whole-Home HD DVR has improved subscriber quality by adding more DVR and broadband-connected customers to its base.

Dish dropped AMC Networks, home of popular shows like "Breaking Bad" and "Man Men" last month following a dispute over programming fees.

The company said the move had no material impact on its churn rate or subscriber numbers as of June 30. 

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