One broken Dish
Pay-TV giant falls despite Sling fling
Dish Network said it continues to bleed subscribers at its core satellite division — the latest sign of pain for pay-TV providers as cord cutters flock to the Web.
Dish shares, which are off 9.6 percent year to date, sank 3.1 percent, to $43.18, on the disappointing results.
Investors chose not to look beyond the core crumble to the good news at SlingTV, the internetstreamed skinny bundle Dish launched three years ago.
Sling’s subscriber base hit 2.21 million, growing 47 percent year-over-year. It was the first time Dish, which is controlled by billionaire Charlie Ergen, reported Sling’s results.
But DishTV, the company’s much bigger satellite-TV business, lost 121,000 subscribers in the quarter, leaving its total base at 11.03 million.
On a call with investors, Chief Executive Erik Carlson admitted the “satellite business is definitely a maturing business … we don’t have the growth dynamics that we had in the early years.”
Noting that DishTV is “funding the future” of the company, Carlson said it ended the quarter with 13.24 million total subscribers, down 429,000 from the year-earlier period.
“For the second straight quarter, subscriber losses in the core satellite-TV segment weren’t quite as bad as feared,” said analyst Craig Moffett of Moffett Nathanson Research. “Still, the accumulated weight of what are now eight years of subscriber losses is impossible to overcome.”
Despite any shifts in the business, the analyst said “the broad outlines” of Dish’s business future are “clear.”
Quarterly net income was boosted by a $1.2 billion tax benefit, to $1.39 billion, from $355 million in the fourth quarter of 2016. Excluding that benefit and other items, Dish earned 57 cents a share, topping analysts’ estimates by 2 cents.
Revenue fell 7.2 percent, to $3.48 billion, missing analysts’ estimate of $3.53 billion.