DISH DISH Network Corporation

By Drew FitzGerald 

Dish Network Corp.'s first-quarter profit fell 7.6% as its satellite-TV customer base continued to shrink, adding pressure on the telecom company to find new income sources.

The company lost 266,000 satellite customers during the three months that ended March 31, while internet-based Sling TV added 7,000 customers, its smallest-ever quarterly gain. Dish ended the period with 12.1 million pay-TV subscribers.

"It's still a declining business," Executive Chairman Charlie Ergen said during a conference call. "I don't want to sugarcoat it, but we think we can build value there."

Some Wall Street analysts said the customer losses were less severe than expected. An increase in average revenue per user to $85.03 from $84.50 a year earlier also cushioned the blow from viewer defections.

Shares rose 3.8% to $34.86 Friday. They are up about 6% over the past 12 months.

Dish's first-quarter profit totaled $339.8 million, or 65 cents a share, down from $367.6 million, or 70 cents a share, a year earlier. Revenue fell 7.8% to $3.19 billion.

The U.S. pay-TV sector has been shrinking in recent years as price-conscious cord-cutters drop expensive cable and satellite-TV connections in search of other forms of entertainment. Dish offset some of those losses by launching online-only Sling TV in 2015, though growth in this market has also slowed in recent months.

A dispute that left customers without Spanish-language channels from Univision will no longer weigh on the business after the companies agreed in late March to sign a new contract. But Dish executives offered no signs of an end to their continued dispute with premium channel HBO, owned by telecom competitor AT&T Inc.

"With regard to HBO and AT&T, there's nothing new to report," Dish Chief Executive Erik Carlson said. "We recently met again with AT&T, but unfortunately they only offer different words with really the same meaning."

Dish's shrinking TV base adds pressure on the company to convert the wireless spectrum licenses it has amassed into a profitable business. The company is equipping a basic network of cell towers to serve business customers by the end of this year to meet certain regulatory requirements. The company intends to build a full wireless network with fifth generation, or 5G, technology in the coming years.

"The best opportunity for us is building a new state-of-the-art stand-alone 5G network," Mr. Ergen said.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com

(END) Dow Jones Newswires

May 03, 2019 15:39 ET (19:39 GMT)

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