Dish Notes: Operational Gains, Financial Weakness

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working Dish Network’s numbers find operational gains amid financial weakness
-- but said investors will love the surprise special dividend of $2 per share.

At about 10
a.m., Dish was up $1.22 (6.3%) to $20.37. The company’s earnings call is
scheduled for noon ET (release is here).

EBITDA, earnings per share, and average revenue per unit all were below
estimates, Bernstein Research’s Craig Moffett noted. Subscriber net growth of
241,000 was well ahead of estimates -- which ranged from a loss of 42,000 to a
gain of 50,000 subscribers -- and subscriber churn (1.57% per month) was better
than forecast and well below the 2.02% of a year ago, according to Citigroup
analyst Jason Bazinet. Bazinet also said subscriber acquisition cost dipped to $694 from $735 a year ago and better than his $725 estimate.

$69.51 vs. forecast $70.72 marked a slight actual decline (0.4%), Moffett said
in a note to clients. “What
is unclear is whether the ARPU miss was due to discounting or trade-down. Most
likely, it was some of both,” Moffett said.

What "tips the scales," though, was the $2 special dividend, Moffett said. He called it “a very welcome development,” especially as Dish has been seen as
a prospective acquirer, having courted Sirius XM earlier this year.