Dish's profit falls, misses Street

(Reuters) - Dish Network Corp posted a lower second-quarter profit on Wednesday that missed Wall Street estimates after the No. 2 U.S. satellite television operator spent more to acquire subscribers, sending its shares down.

The company had previously said it lost 10,000 net subscribers in the three months ended June 30, a vast improvement from a year earlier, when it parted with 135,000.

While some analysts have said Dish is in the midst of a turnaround and is attracting customers from main rival DirecTV, which lost 52,000 subscribers in the same period, Dish's financial results came in weaker than expected.

Second-quarter revenue fell 0.6 percent to $3.57 billion. The company's total costs and expenses rose 9 percent to $3.1 billion, which Bernstein Research analyst Craig Moffett called a "recipe for disaster" in a research note.

"It's getting harder and harder to plausibly argue that this is a turnaround, in our view," he said.

After a dispute over programming fees, Dish dropped AMC Networks, home of the "Breaking Bad" and "Mad Men" TV shows, on July 1. Dish said the move had no material impact on its churn rate or subscriber numbers in the three months to June 30.

The numbers do not reflect the month of July, when a new season of the popular show "Breaking Bad" premiered. The company said it "cannot predict with any certainty the future impact" on its subscriber base from its decision to drop the network.

Brean Murray analyst Todd Mitchell said he expects the companies to reach a resolution eventually.

"AMC needs Dish's distribution and Dish will distribute anything it can get a decent price for," he said.

On a conference call later on Wednesday, analysts and investors will be listening for any update on Chairman Charlie Ergen's plans to diversify Dish's business by building a wireless network.

Dish gave few new details about plans to use its spectrum. It has spent nearly $3 billion on wireless spectrum and assets but cannot go forward with building a wireless network until it gains approval from the U.S. Federal Communications Commission.

The company's net income fell to $225.7 million, or 50 cents per share, from $334.8 million, or 75 cents per share, a year earlier.

Adjusted for a charge related to a satellite license, the company posted earnings of 59 cents per share. That missed Wall Street estimates by nine cents, according to Thomson Reuters I/B/E/S.

Net income was partly weighed down by higher-than-expected costs related to video retail chain Blockbuster, which Dish acquired last year, Brean Murray's Mitchell said.

The lower revenue, at $3.57 billion, missed Wall Street estimates of $3.64 billion.

Subscriber acquisition advertising rose 75 percent year-on-year in the second quarter to $118 million

Dish generated slightly more revenue per subscriber in the second quarter at $78.11, an increase of 5 cents from a year earlier.

Shares in the company fell 67 cents or 2.2 percent to $30.00 on Wednesday.

(Reporting by Liana B. Baker in New York; Additional reporting by Neha Alawadhi in Bangalore; Editing by Supriya Kurane and Dale Hudson)

Source: http://news.yahoo.com/dish-network-posts-lower-quarterly-profit-102038962--finance.html

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