Dish Network Results Improve, But Subscriber Additions Slow

By Chelsey Dulaney 

Dish Network Corp. on Monday reported higher earnings and revenue in the fourth quarter, but the company lost subscribers and had a higher churn due to not having 21st Century Fox programming.

Dish also said Chief Executive Joe Clayton will retire at the end of March and will be succeeded by Chairman Charlie Ergen, who will take the helm as the satellite-TV company is pushing to diversify into new lines of business.

Dish said it saw lower pay-TV subscriber activations and additions in the latest quarter and had a higher pay-TV churn rate as Fox entertainment and news channels weren't available on its service.

In the latest quarter, Dish lost a net 63,000 pay-TV subscribers, compared with an addition of 8,000 net pay-TV subscribers a year ago. Gross pay-TV additions were 615,000, compared with 654,000 a year earlier.

Pay-TV subscriber churn rate, or the rate at which people terminated service, was 1.61%, compared with 1.53% a year earlier.

The company's satellite broadband customer growth slowed to 24,000 net subscriber additions in the quarter from 51,000 additions in the previous year's quarter.

Dish has struggled to boost its subscriber numbers amid what executives have said is a negative pay-TV industry, pressured by a weak economy and heavy promotions from competitors.

The company has also acknowledged that subscriber growth has been impacted by quality of service issues, including not meeting its own standards for installations, answering subscriber calls in an acceptable time frame, and improving the reliability of some of its equipment.

In part to offset losses, Dish rolled out a new online video-streaming service called Sling TV in the U.S. earlier this month. The service features a slimmed down subset of channels, culminating a three-year effort to create an inexpensive streaming TV service to reach a younger generation of viewers.

For the quarter ended Dec. 31, Dish posted a profit of $409.9 million, or 88 cents a share, compared with a year-earlier profit of $283.2 million, or 63 cents a share.

Revenue grew 4% to $3.68 billion.

Analysts polled by Thomson Reuters had projected earnings of 43 cents a share and revenue of $3.7 billion.

Dish has come under scrutiny in recent weeks over its bidding in the record U.S. sale of wireless licenses last month.

The company won a surprisingly large number of wireless licenses in a recent government auction, but is facing criticism from major wireless carriers and some government officials for setting up bidding vehicles in a way that allowed it to secure $3.3 billion in discounts intended for small businesses.

Write to Chelsey Dulaney at [e-mail]

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