Dish Network 1st-quarter profit rises on equipment sales, but company loses 94,000 subscribers

Dish Network 1Q profit rises on equipment sales

ENGLEWOOD, Colo. — Dish Network Corp., the nation’s second-largest satellite TV provider, said Monday that its first-quarter profit rose 21 percent as revenue climbed partly on equipment sales.

But the Englewood, Colo.-based company lost about 94,000 net subscribers during the quarter, which it blamed on the recession, signal theft and increased competition due to slowing growth in the pay-TV industry.

Dish also pointed the finger at itself in a filing with the Securities and Exchange Commission, saying it has “not always met our own standards for performing high quality installations.” The satellite TV provider said it fell short at times in other areas, including answering customers’ calls in an acceptable timeframe, communicating with its subscribers and resolving customers’ problems.

In addition, Dish, which aims to be the low-priced leader among pay-TV providers, said its position was eroded by aggressive discounting by its rivals.

The loss of a distribution deal with AT&T took a bite out of subscriber numbers as well. The agreement, which ended in January, had contributed about 17 percent of Dish’s gross subscriber additions for the year ended Dec. 31. For the quarter, AT&T contributed 5 percent of gross subscriber additions.

Dish said that if it does not come up with another distribution deal to replace the one it had with AT&T, its subscriber additions could decline further and its churn — or customer turnover rate — could increase.

The company earned $312.7 million, or 70 cents per share, for the period ended March 31, up from $258.6 million, or 57 cents per share, a year earlier.

Analysts polled by Thomson Reuters, whose estimates generally exclude one-time items, predicted a profit of 56 cents per share.

Revenue grew 2.1 percent to $2.91 billion from $2.84 billion to meet analysts’ estimates.

Subscriber-related revenue improved to $2.86 billion from $2.81 billion, while equipment sales and other revenue climbed to $32.3 million from $25.1 million.

Last week rival DirecTV Group Inc., the nation’s largest satellite TV provider, reported its first-quarter profit fell 46 percent mostly due to the recession as subscriber growth hit a four-year high.