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DISH Network(R) Reports Second Quarter 2008 Financial Results

Discussion in 'General DISH™ Discussion' started by James Long, Aug 4, 2008.

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  1. Aug 4, 2008 #1 of 72
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    ENGLEWOOD, Colo., Aug 04, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- DISH Network Corporation (Nasdaq: DISH) today reported total revenue of $2.91 billion for the quarter ended June 30, 2008, a 5.6 percent increase compared with $2.76 billion for the corresponding period in 2007.

    Net income totaled $336 million for the quarter ended June 30, 2008, compared with $224 million during the corresponding period in 2007. Basic earnings per share were $0.75 for the quarter ended June 30, 2008, compared with basic earnings per share of $0.50 during the corresponding period in 2007.

    DISH Network lost approximately 25,000 net subscribers during the quarter ended June 30, 2008, ending the quarter with approximately 13.79 million subscribers.

    Detailed financial data and other information are available in DISH Network's Form 10-Q for the quarterly period ended June 30, 2008, filed today with the Securities and Exchange Commission.

    About DISH Network Corporation

    DISH Network Corporation (Nasdaq: DISH), the nation's third largest pay-TV provider and the leader in digital television, provides approximately 13.79 million satellite TV customers with industry-leading customer satisfaction which has surpassed major cable TV providers for eight consecutive years. DISH Network also provides customers with award-winning HD and DVR technology including the ViP722(TM) HD DVR, which received the Editors' Choice awards from both CNET and PC Magazine. In addition, subscribers enjoy access to hundreds of video and audio channels, the most International channels in the U.S., industry-leading Interactive TV applications, Latino programming, and the best sports and movies in HD. DISH Network offers a variety of package and price options including the lowest all-digital price in America, the DishDVR Advantage Package, high-speed Internet service, and a free upgrade to the best HD DVR in the industry. DISH Network is included in the Nasdaq-100 Index (NDX) and is a Fortune 300 company. Visit http://www.dishnetwork.com/aboutus or call 1-800-333-DISH (3474) for more information.
     
  2. Aug 4, 2008 #2 of 72
    tsmacro

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    Well revenue and income are both up even though subscribers were down. Sounds like the subscribers they lost were actually hurting the bottom line somehow then! :lol: Good riddance to bad customers! Actually i'm sure it's more likely that enough existing customers have upgraded their programming (mostly probably due to increases in people w/ HD sets now i'd guess) to make up for the net loss of customers.
     
  3. Aug 4, 2008 #3 of 72
    dahenny

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    25k out of 13.79 million lost? I'm sure Charlie is shaking in his shoes and getting ready to jump off of a very tall building! sarcasm
     
  4. Aug 4, 2008 #4 of 72
    BillJ

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    DISH is blaming the loss in subs on the economy. That makes sense. My monthly bill is $131. If I'm hurting financially, an easy place to save is by going to a less expensive tier or dropping it all together and just getting basic cable. OTOH, if I can't afford an expensive vacation maybe staying home and watching premium TV is an option.
     
  5. Aug 4, 2008 #5 of 72
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    SEC Filing: http://dish.client.shareholder.com/secfiling.cfm?filingID=950134-08-13895
    The negatives are easier to dwell on ... DISH remains a profitable business - doing better this quarter than the same quarter last year - but nobody wants to see a subscriber count loss. It is a ego thing.

    Hopefully with "TurboHD" DISH can turn around those negatives.
     
  6. Aug 4, 2008 #6 of 72
    Greg Bimson

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    Actually, the answer is somewhat surprising...

    Revenue is up, because of yearly price increases spread across the subscriber base. That is what should happen on a year-over-year basis.

    Income should be up, as income is revenue minus expenses.

    It is the expenses where the tales can normally be told. From James' link to the SEC filing, subscriber acquisition costs (SAC) tells a big tale:

    2008Q2 - $699 per subscriber * 752,000 signups = $525,648,000 expenses for Q2
    2007Q2 - $654 per subscriber * 850,000 signups = $555,900,000 expenses for Q207

    By signing up less customers, DISH saved themselves about $30 million in Q2 compared to the year before. If DISH signed up another 100K customers, it would have eaten another almost $70 million in expenses.

    It appears they are trading growth for profitability. Which is fine as long as the subscriber defections (churn) are kept in line.
     
  7. Aug 4, 2008 #7 of 72
    DodgerKing

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    Sub loss also means future decline in profits, it is not only an ego thing. This is the first time either provider has lost subs. Spin it as you like, this is not a good thing.

    As a Direct sub I do not want to see Dish loose subs. This is not good for Direct and Dish subs. Both companies need to remain competitive.

    As far as blaming the economy I have a few questions.

    1. If the economy is to blame, which they blamed last quarter as well, then why did they do relatively bad last quarter while FiOS and Direct did pretty good?

    2. If the economy is to blame, then why is it that the provider with the cheaper package options doing worse than those with the more expensive package options in both profit and sub gains/losses?
     
  8. Aug 4, 2008 #8 of 72
    DodgerKing

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    And don't continue in the negative. The existing subs contribute to profits. Loose them and in the long run, loose profits as well.
     
  9. Aug 4, 2008 #9 of 72
    dbenj

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    Maybe the poor performance has to do with Dish no longer being a leader in programming. Did it start with the cancellation of VOOM?
     
  10. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    No. This is the third "bad" quarter for subscriber count. But that count does seem to be the end of the "poor performance". Otherwise DISH is doing well.

    One can focus on any bad number one wants ... for example, DirecTV losing more customers than DISH in a quarter last year. Too many people try to point to one thing and say DISH is going to lose customers. Losing customers is just part of the business. DirecTV and other competitors do it all of the time as well.

    Staying profitable is the key ... DISH will be around to fight another day (such as today) and make a push to get those customers back. I'd be more concerned if they were posting money losses.
     
  11. John W

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    From the Yahoo News article on this:


    The company blamed "weak economic conditions, aggressive promotional offerings by our competition" and heavy marketing of high-definition programming by rivals.

    DISH also highlighted the growth of "fiber-based pay-TV" service from phone companies like Verizon Communications Inc (VZ.N) and AT&T Inc (T.N), as well as signal theft and other operational inefficiencies.
     
  12. DodgerKing

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    It is one thing to lose customers, it is another when said company does not make up the loss in gains. Profits are up partially because of the lack of expenses from new sub costs. This can be profitable in the short term, but in the long run this trend cannot continue. A company cannot exists if they do not have enough profits from subs to overcome other costs and overhead. I hope they will eventually gain subs. Losing them to FiOS, cable, and Direct is not good for Dish or Direct. They need to maintain a competitive advantage. I, as a Direct sub hope they can.
     
  13. DodgerKing

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    Thanks, but I still do not see the economy playing a role, especially when new subs are signing up for more expensive alternatives.
     
  14. jacmyoung

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    As Greg explained the less new additions, the less SAC, and the less expenses, and the higher profit. Had E* not added one single new sub, their net loss would be 777,000 subs, and profit would probably be $400 million higher.

    They need to keep adding net new subs and at the same time posting profit, in order to attract investors. They say part of the effort in the coming months will be to reduce the churn, keep good subs from cancelling, which means incentives to those call to cancel in order to encourage them to stay. It will cost E* but sure will cost less than $700 to sign up a new sub.
     
  15. FTA Michael

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    Fewer new home sales (folks moving out of apartments) plus more foreclosures (folks moving back into apartments) = fewer potential satellite subs. But DirecTV posted a net gain of 170,000 subs in the same quarter, so maybe the problem is that DirecTV is targeting the high-end viewer while Dish's audience contains more people who are vulnerable to economic downturns.

    Multichannel News goes over the same news here: http://www.multichannel.com/article/CA6583993.html
     
  16. DodgerKing

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    That's a good point. In fact I am currently up here in Mammoth Lakes, CA (a mountain resort town in the Sierras). There are houses that range from a $200k (very cheap by CA standards) to tens of millions. The cable up here literally sucks, so most people have Direct or Dish. When going through the poorer (relatively speaking) areas of town I see more Dish dishes on the roofs (standard ones at that). When going through the wealthier areas I see many more Direct dishes (most being the 5 lnb HD dishes).

    That being said, eventually Dish will need to add more subs. When they do it will cost them to do so. Perhaps the current profits during a slow time can be used to drastically increase the number of subs during good economic times. We can only hope this is the case. I do not want to see Dish fail in any way.
     
  17. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    Proof? What more expensive alternatives are people choosing? I agree that long term the alternatives are more expensive ... and perhaps people are becoming more aware of long term with all the recent problems in the housing market and credit market. But short term there are deals to be had that make the alternatives appear less expensive ... with commitments that outlast any discounts offered where providers will get their discounts back.

    I believe people are getting smarter about the economy ... but if you don't think the economy is playing any role I believe you are wrong.
    It always does ... fortunately DISH has the money.
     
  18. kal915

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    You're right. Right here in this little town not everyone has a lot of money and if you go along almost any neighborhood, there's a lot of standard DISH dishes, and a few with wing dishes. If you go to a luxury sub division, where the houses are at 500k-1 million, you see a lot of DirecTV dishes: half standard, half Slimline HD's (3 LNB)
     
  19. Richard King

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    I just sold off half the DISH stock that I bought over a period of time between Jan and May 1997. I was tempted to sell it all. :(
     
  20. phrelin

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    Spin is great! Dish Network's "basic earnings per share were $0.75 for the quarter ended June 30, 2008, compared with basic earnings per share of $0.50 during the corresponding period in 2007."

    You have to be careful of P&L info when a company has split as accounting has a way of distorting things. In this case, Dish Network's depreciation dropped from $343,932,000 in 2007 to $248,247,000. In the same period, Echostar's depreciation increased $61,601,000 from $1,414,000 to $63,015,000.

    If you simply remove depreciation from the equation, you get the following:

    [​IMG]

    Dish Network's net profit before depreciation did increase 2.8%, but the-Company-previously-known-as-Echostar's net profit before depreciation increased 25.9%.

    Not bad, but I have to explore further what other creative accounting methods may be involved before I express delight at the wonderfullness of it all.
     
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