Satellite TV provider Dish Network Corp. (NASDAQ: DISH) today reported second quarter earnings that were quadruple earnings from the same period a year ago. Net income attributable to common shareholders totaled $257 million, compared with $63 million in the same period a year ago. Dish posted EPS of $0.57, up from $0.14 a year ago and better than analysts’ expectations of $0.53. Revenue for the quarter totaled $3.17 billion, compared with last year’s total of $2.9 billion and estimates of $3.13 billion.
But that was not good enough. The company’s shares are being hammered this morning, down more about -9.5%, due to a reported drop of 19,000 in subscribers. Dish ended the quarter with 14.318 million subscribers. Competitor DirecTV Group Inc. (NYSE: DTV) reported last week that it had added 100,000 new subscribers in the US and 415,000 in Latin America. DirecTV’s U.S. subscribers now number about 18.8 million and its Latin American subscribers total about 5.2 million.
Dish Network’s set-top box maker, Echostar Corp. (NASDAQ: SATS), reported revenue this morning of $603 million, compared with $383 million in the same period a year ago, and well above analysts’ estimates of $479.4 million. However, the company also reported a net loss of $41 million, an EPS loss of -$0.49, compared an estimated EPS loss of -$0.02. In the same period a year ago, Echostar reported EPS of $1.18.
Looking at churn rate and average monthly revenue per subscriber, known as ARPU, Dish Network reported a churn rate of 1.78% for the quarter, compared with DirecTV’s reported churn rate of 1.51%. ARPU for Dish in the second quarter totaled $73.05, compared with DirecTV’s US ARPU of $87.90.
Dish Network’s higher churn rate and its lower ARPU tell the story. DirecTV has sought, won, and kept more profitable customers. DirecTV also stole a key customer, CenturyLink Inc. (NYSE: CTL), from Dish Network. CenturyLink is currently in the process of acquiring Qwest Communications (NYSE: Q) for about $22 billion.
Echostar shares are off about -3.5% and DirecTV shares are essentially flat in early trading today. Dish Network shares have already traded twice normal daily average volume.
26 Broken Stocks to Sell Now – There’s a long list of companies that have jumped off their lows but are still trading at dirt-cheap prices. But BEWARE: these bargain stocks aren’t just cheap, they’re broken. Get their names here or risk losing your shirt.
