Dish Network Misses Q3 Expectations As It Absorbs VOOM And Hopper Costs
Sprint Approves Dish Network Effort To Move Ahead With Takeover Plan
Chairman Charlie Ergen is probably glad to put the quarter that ended in September behind him. His $700M settlement with AMC Networks and Cablevision in the breach of contract trial over the VOOM HD channels, and marketing costs for his controversial Hopper DVR, put a big dent into earnings. Dish reported a net loss of $163.3M, down from a net profit of $319.0M in the period last year, on revenues of $3.52B, -2.2%. The revenue figure was short of the $3.65B that analysts expected. And the 35 cent net loss per share contrasts with the consensus forecast for a 55 cent profit. The biggest hit for Dish was its $730.5M hit for litigation expenses, including $676M for the VOOM case. The company also recorded a $54M programming expense tied to its agreement, as part of the court settlement, to resume carrying AMC Networks’ channels including AMC, IFC, We, and Sundance Channel. The decision in June to dump the channels “contributed, in part, to our higher subscriber churn rate” in the quarter, Dish says. The company ended the quarter with 14.04M subscribers, down 19,000. That’s less of a loss than the company recorded in the quarter last year, and pretty much what analysts expected considering the company’s increased advertising around the Hopper.
The Q3 numbers also include dreary numbers for Blockbuster: It had an operating loss of $12M, a reversal of the $4M in operating income last year, with revenues of $231M, -33.4%. Dish says that it has closed more than 700 domestic Blockbuster stores, leaving 850 open. It warns that it could close more.