Dish Network Profits Sky Above Analyst Predictions in Third Quarter

Andrew Klips |

Satellite content company Dish Network Corp. (DISH) Tuesday morning reported third quarter earnings that beat analyst expectations by more than 50 percent as the company logged additional subscribers for television and broadband services.

For the quarter ended September 30, the London-based company reported revenue of $3.6 billion, up 2.2 percent from $3.52 billion in the year prior quarter.  Dish swung to a profit for the quarter with net earnings of $314.9 million, or 68 cents per share, versus a net loss of $158.5 million, or 35 cents per share, in the third quarter of 2012.

Wall Street was expecting profits of 45 cents per share on revenue of $3.59 billion.

Last year’s quarter was stung by a $700-million settlement with Cablevision Systems Corp. and AMC Networks over program usage.  Cablevision had sued Dish for in excess of $2.5 billion in damages for early termination of a deal to carry AMC’s Voom television service.

In the latest quarter, Dish, a Fortune 200 company, said total pay-television subscribers increased by 35,000 during the quarter.  The quarter ended with Dish having about 14.05 million pay-tv customers, up from about 14.04 million at the end of the comparable quarter last year.  The gain was contrary to analyst predictions that Dish would lose nearly 40,000 paying members during the quarter.

Average revenue per user in the company’s pay television segment was $81.05, an improvement of 5.3 percent from $76.99 in Q3 2012.  Churn rate declined by 14 basis points to 1.66 percent.  Dish has been trying to control the churn rate as it combats growing competition in content providers via online entertainment.

Approximately 75,000 new customers added Internet broadband services, bringing total subscribers to roughly 385,000, up 24 percent in the last 12 months.

Total costs and expenses during the quarter were shaved to $3.2 billion from $3.9 billion, aided by no litigation costs in the recent quarter and lower general and administrations expenses.

Revenue at EchoStar, the set-top box maker that Dish spun-out early in 2008, improved more than 10 percent to $848.9 million, although profits sunk to $4.3 million, or 5 cents per share, from $22.6 million, or 26 cents per share, in last year’s quarter.

For the first nine months of the year, revenues are up 1 percent to $10.76 billion as subscriber-related sales have improved 5 percent to $10.28 billion.  Net income for the first three quarters is $519 million, or $1.13 per share, compared to $428 million, or 95 cents per share, in the same period of 2012.

Shares of DISH closed down by 1.6 percent on Monday at $47.50, but were ahead by about 30 percent so far in 2013.  In pre-market activity on Tuesday, shares have jumped back up to $49.60 for gains of better than 4 percent and representing the highest level for shares of Dish in more than 13 years if it holds into the open.

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Symbol Name Price Change % Volume
DISH DISH Network Corporation 57.40 -1.78 -3.01 3,862,911
HUSKF Husky Energy Inc. 11.93 -0.12 -1.00 3,700


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