Dish Meets Estimates as Broadband Offsets Pay-TV Loss

Dish Network Corp., the second-largest U.S. satellite-television provider, reported revenue that met analysts’ estimates as broadband subscriber gains helped offset losses in pay-TV customers.

Second-quarter revenue climbed 5.8 percent to $3.69 billion, matching analysts estimates. The company added 36,000 new broadband subscribers, trailing the 53,000 average projection of six analysts. Dish lost about 44,000 pay-TV customers, the Englewood, Colorado-based company said in a statement today. That was less than the loss of 46,000 estimated by analysts.

Demand for broadband services is helping the company retain some subscribers even as pay-TV customers are tempted to defect in favor of online video options like Netflix Inc. Amid a frenzy of consolidation in the industry, investors are watching to see if Dish Chairman Charlie Ergen will make a move.

Sprint Corp. has ended talks to buy T-Mobile US Inc., the No. 4 wireless carrier, a person with knowledge of the matter said yesterday. In May, Ergen said he would be interested in T-Mobile if Sprint failed to buy it. Last week, Iliad SA, the French telecommunications company, approached T-Mobile about a purchasing a stake.

The average monthly bill for a Dish customer rose to $84.15, up from $80.81 a year ago.

“Earnings have been supported by pretty decent pricing year over year,” Todd Mitchell, an analyst at Brean Capital in New York said in an interview before earnings were released. He has a buy rating on Dish shares.

T-Mobile Prize

Second-quarter net income was $213.3 million compared with a loss of $11.1 million a year earlier. Earnings per share of 46 cents missed the average analyst estimate of 51 cents.

Shares of Dish rose 1.4 percent to $63.04 at 10:06 a.m. New York time.

Investors will be more interested in Ergen’s comments on consolidation than in quarterly earnings, Mitchell said.

“T-Mobile has been the prize on Dish’s mind since the beginning,” Mitchell said, referring to the U.S. wireless carrier of Deutsche Telekom AG. “If you combine satellite with an LTE platform, you have a very interesting competitive dynamic. You could offer a very interesting wireless video play, and you’d have the ability to have a ubiquitous footprint anywhere in the country.”

Dish announced in July that it plans to participate in the Federal Communication Commission’s spectrum auction, letting the company buy airwaves that can be used to accommodate the growing number of smartphones, tablets and other wireless-data services.

The satellite-TV company has a portfolio of wireless airwave licenses worth almost $26 billion, heightening speculation about how the company can put the airwaves to use. Owning airwaves raises the possibility that Dish could become an acquisition target of one of the wireless carriers, or that it could build its own wireless network.

Before it's here, it's on the Bloomberg Terminal.