Dish Q4 profit down 18%, subs up

Analyst: no sign of consumers cutting TV services

NEW YORK -- Dish Network reported a lower fourth-quarter profit on Monday as it swung to a subscriber gain after a year-ago decline. Investors cheered the renewed user growth, boosting the stock 7.7% to $21.50.

A prominent analyst also said the subscriber additions are good news for the overall pay TV industry and should allay fears that consumers could cut their cable and satellite TV cord to fill their video needs online only.

The satellite TV giant posted a quarterly profit of $179 million, 18% down compared with $217 million in the year-ago period. Revenue rose 1.4% to $2.96 billion.

Dish gained approximately 249,000 net subscribers during the latest quarter, giving the company approximately 14.1 million subscribers at year-end. In the year-ago quarter, it had lost 102,000 customers. The number of net subscribers gained for the full year 2009 amounted to about 422,000.

Analysts had different takes on the latest results.
Sanford C. Bernstein analyst Craig Moffett said "the jury is still out" on whether Dish can grow subscribers profitably after an aggressive advertising campaign that helped it gain customers. "More subs, but less money" was the title of his note to investors.

But Collins Stewart analyst Thomas Eagan argued: "The company's results confirm that the company is is firmly in a turnaround phase, but with potential that still seems somewhat volatile."

Moffett said the larger implication of the Dish subscriber results is that the major U.S. pay TV providers added 2.2 million customers in 2009, up from 1.8 million in 2008. While the digital TV transition boosted first-half results, the second half also saw an acceleration, he highlighted. "In short, there is simply no empirical evidence at all of video cord cutting," Moffett concluded.
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