Dish Misses Wide in Q3

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Dish Network lost about 111,000 net subscribers in the third quarter, widely missing analyst consensus estimates of 80,000 losses.
Gross customer additions were also short of the mark - 656,000 in the period, vs. analysts' consensus of 667,000. The weakness in gross additions was magnified by higher than expected churn levels - 1.83% compared to consensus of 1.78%. Revenue of $3.6 billion slightly missed consensus of $3.63 billion, but cash flow of $874 million was disappointing compared to consensus estimates of $908 million.
The one bright spot? Net income again rose significantly - by 30% in the quarter to $319 million. Net income was also up 30% in the second quarter.
In a research note, ISI Group media analyst Vijay Jayant said the results were light despite lowered expectations, but could have been worse. He added that a special $2 per share dividend the company announced today should "placate investors who were looking for more operational strength."
The results were in sharp contrast to rival DirecTV, which reported its best quarter of net new customer growth in seven years last week.
In a statement, Dish CEO Joe Clayton said the subscriber losses were an improvement over the second quarter, when Dish lost 135,000 customers, and was affected by increased competitive pressures, including aggressive competitive promotional offers, discounting and a weak housing market.
"Going forward, we plan to build on the momentum of our introduction of the Blockbuster-branded programming service which allows Dish customers to stream movies and TV shows as well as receive DVDs by mail," Clayton said in the statement.
Dish is scheduled to hold a conference call with analysts to discuss third quarter results at noon today.

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