Dish Network serves up big earnings
The satellite TV company adds customers and reduces churn.
Net income at the second-largest satellite TV company fell to $360 million, or 80 cents a share, from $549 million, or $1.22 a share, a year earlier. However, revenue surged 11% to $3.58 billion as Dish added about 104,000 net subscribers, beating the 62,000 Wall Street had predicted.
Analysts had expected the company would earn 70 cents on revenue of $3.62 billion. In an encouraging sign, churn -- the rate of customers who quit the service -- fell to 1.35% versus 1.47% during the same period a year earlier.
"It's a challenging environment with increased pricing pressure but you are seeing Dish execute better than last year," Brean Murray analyst Todd Mitchell told Reuters.
As Bloomberg News notes, investors have many questions about Dish Network that they will want answered during the earnings conference Monday. For one thing, Dish is seeking Federal Communications Commission permission to provide voice and data service over land-based towers using satellite spectrum. Analysts such as ISI Group's Vijay Jayant believe chairman Charlie Ergen won't build a network but will either partner with a wireless company or sell the spectrum, according to Bloomberg News.
Whether these results are sustainable remains to be seen. Comcast (CMCSA) and other cable companies are formidable competitors. Brian Roberts, the CEO of the world's largest cable company, has said he is optimistic that he can reverse the trend of cable customers opting for satellite TV. The Philadelphia company lost 37,000 cable subscribers in the first quarter, about the same number it lost year.
Earlier this month, Dish announced it would drop AMC and several other cable channels. This is the culmination of a dispute that began in 2008, when AMC filed a $2.5 billion suit against Dish Network after the satellite service dropped VOOM HD, which the New York Times describes as "a defunct set of high-definition cable networks."
Jonathan Berr is a reluctant cable customer. He does not own shares of the listed companies. Follow him on Twitter @jdberr.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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