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Dish Profit Tumbles as Targets Missed

Image: Dish Profit Tumbles as Targets Missed
(AP)

By    |   Friday, 19 Feb 2016 05:21 PM


Dish Network Corp. posted profit that missed analysts’ estimates as more TV customers canceled pay-TV subscriptions, further pressuring Chairman Charlie Ergen to show investors that he has a plan beyond the satellite-TV business that will capitalize on the company’s vast airwave holdings.

Dish stock (DISH) plunged nearly 10 percent after earnings were released Thursday, but shares recovered to close 2.41 percent higher Friday at $44.21.

The No. 2 U.S. satellite TV provider said full-year net income attributable to the company tumbled 21 percent from a year earlier to $747.1 million, or $1.61 per share. This was below the average analyst estimate of $1.97 a share, according to Thomson Reuters I/B/E/S.

As the pay-TV industry tackles subscriber losses, Englewood, Colorado-based Dish has been trying to lure viewers to its cheaper $20-per-month Sling TV, an online-streaming service with a smaller bundle of channels.

The company ended the year with roughly 13.9 million pay-TV subscribers, down from 13.98 million a year earlier, as net pay-TV subscribers fell 81,000 last year after declining 79,000 in 2014. Cancellations — or “churn” — picked up, rising to 1.71% from 1.59%.

Meanwhile, Dish added about 105,000 Sling TV customers in the fourth quarter, according to a Bloomberg Intelligence estimate. The Wall Street Journal reported that Sling TV now has more than 600,000 subscribers, according to people briefed on the numbers, shedding some light on consumer appetite for cheaper packages of live channels.

Dish hasn’t been publicly breaking out the subscribers for Sling TV since it launched a year ago, aside from an initial disclosure that it had 169,000 customers as of March 31, 2015, WSJ.com reported.

There is increasing attention in the industry on Sling TV — and that of other slimmed-down bundles of channels — because of pressures on the traditional pay-TV business. Channels such as ESPN that are carried on Sling TV have touted the service as important to powering their subscriber growth as people “cut the cord” and drop their traditional pay-TV packages or downgrade to skinnier, less-expensive bundles, WSJ.com reported.

But a major question for television executives has been whether Sling TV is stealing away subscribers from the traditional pay-TV universe or if it is adding new customers. On a conference call with analysts Thursday, Sling TV Chief Executive Roger Lynch said the “vast majority” of its customers are “not currently pay-TV subscribers.”

“Either they have never had pay-TV because they are 25 years old and it never crossed their mind to have pay-TV,” Lynch said. “Or, they cut the cord some time in the last one, two, three, four, five years.”

Elsewhere, HBO revealed that its broadband-only service HBO Now has drawn 800,000 subscribers since its launch in April, The New York Post reported. “It has a way to go before it reaches its aim of serving around half of the 10 million or so folks who are going without paid TV service,” notes the Post’s Claire Atkinson.

(Newsmax wire services contributed to this report).

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Dish Network Corp. posted profit that missed analysts' estimates as more TV customers canceled pay-TV subscriptions.
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2016-21-19
Friday, 19 Feb 2016 05:21 PM
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