Dish Network Corp., formerly EchoStar Communications Corp., saw its fourth-quarter net subscriber gains dive 76%, compared with the year-ago period, according to the company earnings released Tuesday.
Dish Network’s fourth-quarter results sparked a quick report by Sanford C. Bernstein analyst Craig Moffett, who had estimated that the satellite provider would gain 148,000 subscribers in the fourth quarter. In reality, he noted that Dish Network’s performed below expectations, and that its net-subscriber additions had “plummeted” to 85,000 in the fourth quarter last year, versus 350,000 in the fourth quarter in 2006.
“The problem, it would seem, is housing,” Moffett wrote. “And not just housing growth, but the lack of housing velocity. With American families unable to finance new mortgages, existing home sales have slowed to a trickle; families are staying put. That means lower churn for the whole industry, and – in turn – fewer gross additions for Dish Network.”
Dish Network ended 2007 with 13.78 million subscribers, an increase of 675,000 from its 13.1 million subscribers at the end of 2006.
The direct-broadcast satellite provider reported total revenue of $2.89 billion for the fourth-quarter last year, a 12% increase compared with $2.58 billion for the corresponding period in 2006.
Net income totaled $175 million for the quarter, compared with $153 million during the corresponding period in 2006. Basic earnings per share were 39 cents for the quarter, compared with basic earnings per share of 35 centers during the year-ago period.
For 2007, Dish Network reported total revenue of $11.09 billion compared with $9.82 billion for 2006, an increase of 13%. Dish Network’s 2007 net income totaled $756 million, compared with $608 million for 2006. Basic earnings per share were $1.69 in 2007, compared with basic earnings per share of $1.37 in 2006.
Dish Network completed the spin-off of its technology and certain infrastructure assets, including its set-top box business and certain satellites, through the distribution of shares in EchoStar Corp. Jan. 1. Following the spin-off, Dish Network retains its pay-TV business. In connection with the spin-off, EchoStar Communications changed its name to Dish Network.