Dish Network (NASDAQ:DISH) revealed first-quarter earnings and sales that were shy of Wall Street expectations on Thursday as subscriber growth slowed and expenses rose.
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The Englewood, Colo.-based pay-TV provider reported a 40% decline in net income to $216 million, or 47 cents a share, compared with a year-earlier profit of $360 million.
The results were below average analyst estimates of 53 cents in a Thomson Reuters poll.
Revenue for the three months ended March 31 was $3.56 billion, down slightly from $3.58 billion a year ago, missing the Street’s view of $3.61 billion.
While subscriber-related revenue for its Dish segment increased 4% to $3.22 billion, Dish’s Blockbuster segment posted declines and the growth of pay-TV subscriber additions slowed from the prior year.
In total, Dish added roughly 36,000 subscribers, down from a year ago and below analysts’ expectations of a 68,000 improvement.
Also hurting the results were higher subscriber-related expenses driven by increased programming and subscriber acquisition costs.
Shares of Dish, the second-largest U.S. satellite TV company behind DirecTV (NYSE:DTV) slumped close to 3% to $38.50 in early trade. DirecTV earlier this week saw its shares surge to a record after besting quarterly expectations amid strong subscriber growth in Latin America.
Despite the disappointing performance, Dish CEO Joseph Clayton said the company is pleased with the market’s response to the roll out of its new DVR system Hopper and Sling, which he says comes “despite headwinds from our first price increase in two years.”
Broadband sales were also encouraging, Clayton said, as “almost all” of its dishNET customers have bundled with its pay-TV service.