Dish Network Profit Falls 81%

NEW YORK — Dish Network Corp. said Monday that its second-quarter profit slid 81 percent on TiVo Inc. litigation costs and rising expenses, but the nation's second-largest satellite TV provider managed to add subscribers and maintain revenue.

The Englewood, Colo.-based company earned $63.4 million, or 14 cents per share, for the period ended June 30. That's down from $335.9 million, or 73 cents per share, last year.

Analysts polled by Thomson Reuters, whose estimates typically exclude one-time items, forecast profit of 67 cents per share.

Revenue was nearly flat at $2.90 billion, with prior-year revenue coming in at $2.91 billion. Analysts expected revenue would not stray far from year-ago results, predicting $2.91 billion for the current quarter.

Total costs and expenses rose to $2.64 billion, which included a TiVo litigation expense of $196.4 million. In a worst-case scenario, Dish's court battle with TiVo could force Dish to yank its digital video recorders over patent claims.

Subscriber acquisition costs increased to $388.3 million from $371.4 million, while general and administrative expenses grew to $143.5 million from $122.3 million.

Dish, widely viewed as one of the weaker players in the pay-TV industry, says it added about 26,000 net subscribers – its first quarterly increase in five quarters. The pay-TV industry includes cable, satellite TV and phone companies that provide TV services.

Dish, which concentrates on being a low-cost provider, said its subscriber growth was helped by the digital transition on June 12, the completion of its security access device replacement program and new sales and marketing efforts.

The company said its low-cost provider approach has been weakened by competitors' aggressive promotional pricing to draw new subscribers as well as other promotions used to keep existing subscribers. Signal theft and other types of fraud have also hurt its position, but Dish said its security access device replacement program was meant to resecure its system.

Average monthly subscriber churn rate, or the rate at which it lost customers, fell to 1.73 percent from 1.87 percent.

Comments

[Pol Junkie]

I dropped Dish this year. Most of TV is total trash, so I decide to just get what I want to watch on internet via Hulu or bittorrent.

IPTV is the future, the first to be able to deliver it, and make a profit will be winner. You can expect networks/c­able/satel­lite companies will fight this trend tooth and nail, but its a losing cause ultimately, just ask the RIAA.

[audadvnc]

I don't have satellite or cable TV, and my rates for those services have remained stable for years - at $0 a month!

Kill your TV!

[LiberalBuzz]

I like Dish but would rather DirectTV but don't because they have the worst channels to try and remember. Dish has a very simple and easy to remember channel selection. Direct? Tried and after a year gave up and switched.

[poster1122]

In defense of DISH, I've had them for something like 7 years and have had maybe 2-3 problems over those 7 years, and those resulted in outages of no more than half an hour. That was much better than my experience with Comcast who would have problems 2-3 times *every* year. I live in the SF bay area, and while we have a handful of powerful rainstorms, we don't have really bad weather by the standards of the rest of the country, so satellite reception has never been a problem for me. And again, to reiterate what other people have posted, they have a pretty nice price point.

[thefalcon7]

We had 56, you got that right, 56 outages in one year with Comcast cable. And the overall signal quality was horrible. And the customer service? Useless. They were a nightmare!
We cancelled as soon as we wer able. We live in the Denver/Boulder metro area.

[gtalkspolitics]

DISH went wrong expecting $399. up front for equipment.

[thefalcon7]

We didn't buy the equipment. You don't have to. We lease it from Dish Network *fully* warranteed for around $2.00-$3.0­0 a month extra for both a regular receiver and a DVR. Once again, what's the problem?

[gtalkspolitics]

Perhaps it depends on the area you're located in?

[westreal]

I don't get why you guys are complaining. These prices you're throwing out is only if you want to OWN the receivers. I've had Dish for more than 10 years and they are still cheaper than Directv, Comcast in my area. My friends all complained about comcast and they finally came over to Dish and are happy. My family members bought into it years ago because they were jealous of our service when they visited during the holidays. Nobody I know complains about the service or price.

[Ozarks]

They raised prices in May I think. The letter identifying price increases had a caveat said they will raise prices again "within a year". If they lose the court proceedings regarding Tivo and have to reclaim all Dish DVR's they will go in the tank pretty quick. If the FCC goes to Ala Cart , they may go in the tank. Right now they are having regular subscribers subsidize their purported "expansion" . I can image the letter I will receive from Dish. Gee, we have to take back the DVR sorry. But your price will not go up for a couple of months. What a deal!

[thefalcon7]

I still don't get it. When I compare prices for the service I want, Dish Network still beats out Direct TV.

Now as for your comments on DVR's possibly being deep-sixed with Dish Network, and the resulting problems for the company and it's customers, *that* I can understand.

[thefalcon7]

Our family's had Dish Network since the late 1990's. We have never had a problem with their service and they were, and still are, a *lot* cheaper than Direct TV.

We have also *not* had any problems with customer service, cancelling or re-signing up for service.

They also won awards for customer service in the business. So I just don't get other's problems with Dish Network, unless they had a communications problem with customer service.

And no, I don't have stock in Dish Network. ;-)

[fask]

This couldn't have happened to a nicer satellite company!

[westreal]

I've had Dish for over 10 years and never had a serious problem they didn't fix immediately. But I did want to go to Directv because I heard their service is cheaper. Uh, nope. They are so much more expensive than Dish. But this article is bad news because it looks like they are in a position of being taken over by Directv or some other company which means my cheap service goes out the window. I hope they stay a solvent company because I am very much a happy customer.

[rmct]

Direct TV never gives me a problem and it is cheaper than cable