"Dish 1Q Net More Than Doubles As $500M TiVo Settlement Unveiled," published at 6:50 a.m. EDT, misstated Dish's subscriber count. A corrected version follows:)
Dish Network Corp.'s (DISH) first-quarter profit more than doubled as prior-year litigation expenses were supplanted by a $340.7 million credit, and the company and former unit EchoStar Corp. (SATS) settled all their ongoing patent litigation with TiVo Inc. (TIVO).
The two companies, along with TiVo, said the patent deal will see Dish and EchoStar pay TiVo $500 million. TiVo shares jumped 25% to $12 in recent premarket trading.
TiVo has been embroiled in patent litigation over its digital-video-recorder technology. It filed patent lawsuits against AT&T Inc. (T) and Verizon Communications Inc. (VZ) in recent years and in February was sued by Motorola Mobility Holdings Inc. (MMI) in a matter involving DVRs.
Dish also said Michael Kelly, executive vice president for commercial and business services, was named president of Blockbuster. Dish won last month's bankruptcy court auction for the video rental business' assets with a bid it said was valued at about $320 million. Earlier, it agreed to buy DBSD North America Inc. out of bankruptcy for about $1 billion.
Dish recently shifted strategy, attempting to attract more affluent customers who are willing to spend more each month on video and less likely to cancel their service, emulating rival DirecTV Group Inc. (DTV). Earlier, Dish targeted lower-end customers, many of whom were hit hard by the economic downturn.
The company gained a net 58,000 subscribers during the first quarter, snapping a streak of quarterly subscriber losses that had started in 2010's second quarter. Its customer base ended the latest period at 14.2 million.
Dish reported a profit of $549 million, or $1.22 a share, up from $231 million, or 52 cents a share, a year earlier. Revenue rose 5.5% to $3.22 billion.
Costs plunged 14% amid the litigation impacts.
Analysts polled by Thomson Reuters most recently forecast a profit of 68 cents on $3.23 billion in revenue.
Meanwhile, EchoStar--the maker of set-top boxes that was spun off from Dish at the beginning of 2008--posted a profit of $17 million, or 19 cents a share, down from $72 million, or 84 cents a share, a year earlier. Revenue fell 23% to $480 million.
Dish's class A shares closed Friday at $25.04, while EchoStar finished at $37.08. Neither was active in recent premarket trading.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; email@example.com