Dish Network Corp., the second-largest U.S. satellite-TV provider, reported a surprise third-quarter loss and revenue that trailed analysts’ estimates.
The net loss was $158.5 million, compared with a profit of $319.1 million a year earlier, the company said in a regulatory filing today. Dish recorded litigation-related expenses of $730 million in the period. Analysts had predicted a profit of $251 million, the average estimate compiled by Bloomberg showed.
Dish lost 19,000 net subscribers in the quarter, a smaller decline than the average analyst estimate of 36,000. Subscriber acquisition costs jumped 15 percent to $453 million.
Some investors have overlooked Dish’s failure to gain customers amid the Englewood, Colorado-based company’s plans to get into the wireless business, Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York, said in an interview before the release. While customer turnover, or churn, has dropped, the lack of growth is worrisome, he said.
“They are still struggling to find their footing,” Moffett said. “Their costs are rising faster than their revenues, with a price-sensitive customer base in many rural areas. They’ve stabilized their churn rate but not enough to make the business really grow.”
Sales fell 2.2 percent to $3.52 billion, trailing the $3.56 billion average analyst estimate.
Dish is awaiting Federal Communications Commission approval to use its airwaves to transmit mobile video and data. The company has said it is searching for a partner that already has a wireless network to avoid spending billions on building a new one.
Dish fell 1.6 to $34.83 at yesterday’s close. The shares have risen 22 percent this year through yesterday. DirecTV, the largest U.S. satellite TV company, reports earnings later today.