Dish’s Sales Trail Estimates as Subscribers Miss Projections
Dish Network Corp. (DISH), the second-largest U.S. satellite-television provider, reported first-quarter sales that trailed estimates after adding fewer customers than analysts projected.
First-quarter net income fell to $216 million, or 47 cents a share, from $360 million, or 80 cents, a year earlier, the Englewood, Colorado-based company said in a statement today. Sales fell 0.7 percent to $3.56 billion, lower than the $3.61 billion average analyst estimate.
Dish added about 36,000 customers in the quarter, compared with the 57,000 average estimate of 10 analysts surveyed by Bloomberg. The company raised prices for the first time in about two years, although average monthly revenue per pay-TV customer rose just 3 percent to $78.54, trailing the $79.59 average analyst estimate.
“The first rate increase in two years could not fully offset programming expense and subscriber acquisition cost increases,” Vijay Jayant, an analyst at ISI Group in New York, said in a note to clients. He has a buy rating on the shares.
Dish’s stock fell 2 percent to $38.80 at the close in New York. The shares have climbed 6.6 percent this year.
Dish added 66,000 satellite broadband customers, almost all of which bundled the service with satellite-TV service, Chief Executive Officer Joseph Clayton said in the statement.
Dish is seeking to bundle its satellite-TV and Internet services with a mobile product through a merger with Sprint Nextel Corp. (S) Dish is awaiting a decision from a special committee of Sprint’s board members to determine if its offer is superior to a $20.1 billion offer from SoftBank Corp. (9984), a Japanese carrier.
Billionaire Charlie Ergen, Dish’s chairman and co-founder, said in a conference call he expects SoftBank will raise its bid, based on the operating cost savings the Tokyo-based company said it could bring to Sprint by 2017.
In a filing today, Dish said it owned $592 million in Sprint derivative financial instruments as of May 1.
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