Dish Network beats 1Q earnings estimates, but loses subscribers

May 13 05:42 2015

Satellite TV provider Dish Network (DISH) reported improved profit and revenue for the first quarter, but lost about 134,000 subscribers. Dish now has 13.8 million subscribers, down from 14.1 million at the end of the first quarter last year. Shares rose slightly in premarket trading, but fell 1.1% after the market opened to $66.10.

Net income doubled to $351 million, 0.76 cents per share, from $175.9 million, or 0.38 cents per share, for the first quarter. That beat the $195.3 million average net income estimates compiled by Bloomberg. Revenue rose slightly, about 3%, to $3.7 billion, but fell short of estimates of $3.73 billion.

The TV provider raised prices in January, which led to the average user’s monthly fee rising to $86.01 from $82.36 in the first quarter of 2014. But a few more subscribers left than last year, as the churn rate rose to 1.6%, compared to 1.4% last year. Disputes with Fox and Turner Broadcasting likely increased subscriber losses, the company said. Not included in the financials were a breakout of subscribers to Dish Network’s Net-delivered Sling TV service, which launched in February.

As subscriber losses continued, investors will focus on Sling TV and Dish Networks wireless spectrum holdings, said investment banking advisory firm Evercore ISI in an earnings review note to investors Monday. “DISH is transforming from a DBS company to an organization that has substantial spectrum assets and a fledgling over-the-top video service,” the note said. “We continue to believe that the spectrum assets are not fully valued within the portfolio and that Dish is more likely to be an arms dealer in the wireless business than an all-out competitor.”