Dish Revenue Below Views, Loses Pay-TV Users
Dish Network Corp (NASDAQ:DISH), the second-largest U.S. satellite TV company, reported lower-than-expected quarterly revenue as it lost pay-TV subscribers due to increased competition.
Shares of the company, led by media mogul Charlie Ergen, fell as much as 5 percent in early trading.
Dish said it lost about 12,000 pay-TV subscribers in the third quarter compared with the second quarter.
Analysts on average had expected net addition of 22,100 subscribers, according to market research firm StreetAccount.
Dish, which also offers broadband services, attributed the loss of pay-TV subscribers to intense competition, with rivals offering discounts to new customers and aggressive plans to existing ones to retain them. (http://bit.ly/1vDONSw)
"While results disappointed, it is unlikely to shift investor focus away from the ultimate outcome of Dish's spectrum and M&A opportunities," Jefferies analysts wrote in a note.
Dish has spent billions of dollars to buy spectrum in the past few years as it looks to diversify from its pay-TV business, which competes in a mature market with cable, telecom and online video providers.
The company plans to bid in the Federal Communications Commission's November auction of airwaves previously occupied by the government. Dish will be up against U.S. wireless carriers such as Verizon Communications Inc <VZ.N>, AT&T Inc <T.N> and T-Mobile US Inc <TMUS.N> in the auction.
Dish isn't too concerned about its core pay-TV business right now as it is focusing on using its spectrum to move into the wireless market, Pacific Crest Securities analyst Andrew Hargreaves told Reuters.
The satellite TV company is also playing hard ball on agreeing to contract renewals with media companies such as CBS Corp <CBS.N> and Time Warner Inc's <TWX.N> Turner Broadcasting.
Dish dropped some of Turner's channels such as CNN and Cartoon Network in October after the companies failed to hammer out a deal and it is also at odds with CBS Corp over the monthly price per subscriber.
Dish, which has about 14 million pay-TV users, said average revenue per pay-TV subscriber rose to $84.39 in the quarter from $80.98 a year earlier, mainly due to price increases in February.
Net income attributable to Dish fell to $145.5 million, or 31 cents per share, in the third quarter ended Sept. 30 from $314.9 million, or 68 cents per share, a year earlier, mainly due to higher expenses.
Revenue rose 4.8 percent to $3.68 billion.
Analysts on average had expected a profit of 39 cents per share and revenue of $3.69 billion, according to Thomson Reuters I/B/E/S.
Rival DirecTV <DTV.O> is scheduled to report its results this week.
Dish shares were down 3.1 percent at $61.82 in late morning trading on the Nasdaq.
(Reporting by Anya George Tharakan and Supantha Mukherjee in Bangalore; Editing by Kirti Pandey)