Dish Network Misses 3Q Earnings Targets With 111,000 Drop In Subs

Analysts feared that Dish Network would come in lighter than they’d forecast when they saw how well DirecTV did with its NFL Sunday Ticket promotion and lower-than-expected sub losses at Comcast and other cable operators. Dish ended 3Q with net income of $319.1M, up 30.2% from the period last year, on revenues of $3.6B, up 12.3%. That revenue figure was just slightly lower than the $3.65B the Street projected. But earnings, at 71 cents a share, missed analysts’ target of 73 cents. The big questions today will probably revolve around the 111,000 drop in subscriptions to 13.95M — that compares to a 29,000 loss of subs in the same period last year. Before the recent run of 3Q announcements from Dish’s competitors, Brean Murray Carret analyst Todd Mitchell predicted that the company would lose 25,000 customers and Credit Suisse’ Stefan Anninger forecast a drop of 87,000. On Friday Anninger revised his projection to -174,000. “We spoke to some investors that had anticipated a loss between 150k to 200k (after DirecTV disclosed its) results last week so overall, we would say this is not as bad as feared,” says Wells Fargo Securities analyst Marci Ryvicker. Dish attributed the loss to competitive pressures as well as “the weak housing market in the United States combined with lower discretionary spending.” Dish says that Blockbuster, which it acquired in April, had a net loss of $177,000 on revenues of $347M, but didn’t provide a comparison with previous years saying that the operation has changed so muchit “would not prove useful in assessing our post acquisition earnings and cash flows.” Blockbuster operated 1,500 retail stores as of the end of September. “We have negotiated flexible termination provisions in the leases of over 900 of these stores, should estimates of future revenue growth not meet our expectations,” Dish says. The company also announced this morning that it will pay a non-recurring dividend of $2 a share. That news “not only represents a welcome return of cash to shareholders but also signals that Chairman Charlie Ergen isn’t going to hoard cash to build his wireless field of dreams (probably),” says Bernstein Research analyst Craig Moffett.