Dish showing its cracks after more sub losses
EmptyDish Network posted its second straight quarter of falling subscribers, a first in the company's history, and its shares were battered Monday as a result.
The country's No. 2 provider of satellite TV service behind DirecTV said it lost 10,000 net subscribers in the third quarter and that its profit fell 54% to $92 million, the latter largely owing to a $106 million write-down on falling investments. Revenue was up 5% to $2.94 billion.
The loss of customers left Dish with 13.8 million subscribers, compared with 17.3 million for competitor DirecTV.
While some analysts were prepared for Dish's sinking metrics because its lower-income subscribers are more susceptible to a bad economy, others, who expected the company to add as many as 50,000 subs, were surprised.
Wall Street reacted poorly to the news and the stock sank 15% to $13.24, a 52-week-low.
Churn also presented a problem, rising to an unprecedented 2.02%.
The third-quarter report wasn't all bad, though, as Dish said the average amount each customer is paying per month rose almost 6% to $69.82.
The company also said Monday that because it loses a marketing partnership with AT&T to DirecTV in February, future subscriber growth "may be impaired."
EchoStar, which split into a separate company, also posted third-quarter results Monday. The set-top box and satellite services outfit lost $308 million, compared with a loss of $7 million a year ago, mostly because of impairment charges related to securities. Revenue surged 52% to $616 million. (partialdiff)