Cord-Cutting Clips Dish Network's Profit -- WSJ
May 04 2019 - 3:02AM
Dow Jones News
By Drew FitzGerald
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 4, 2019).
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 4.4% to $35.08 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 04, 2019 02:47 ET (06:47 GMT)
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