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February 25, 2013

DISH Q4 Profit Misses Mark, in Sharp Contrast to DirecTV

By Tara Seals, TMCnet Contributor

DISH network missed analyst estimates for the fourth quarter, with net income falling to $209 million from $313 million one year ago. The No. 2 U.S. satellite TV provider suggested larger customer acquisition costs were to blame.

DISH revenue slid 1.1 percent to $3.59 billion, which was higher than the $3.56 billion average analyst estimate. But margins bit it, leading the company to trail analyst expectations of $240.4 million in profit.

For 2012, “higher subscriber-related expenses driven by programming costs, increased subscriber acquisition costs from higher gross additions, as well as certain one-time items” were to blame, the company said.  

Those include expenses related to litigation.

DISH added just 14,000 net new pay-TV subscribers in the fourth quarter, while analysts had anticipated it to claim 48,000. The company said that going forward, higher carriage fees are forcing it to raise prices about $5 per month per package.

In contrast, No. 1 U.S. satellite TV provider DirecTV (News - Alert) grew profit 31 percent year-over-year for the fourth quarter of 2012, even as subscriber additions ebbed. The success came on the back of success in Latin America and a strategic shift towards “premium” subscribers who contribute more ARPU to the company coffers.

The company beat Wall Street estimates handily for the fourth quarter, posting earnings of $942 million, or $1.55 per share, for the quarter ended Dec. 31. That's up from $718 million, or $1.02 per share one year ago.

The El Segundo, Calif. company crossed the 20 million subscriber threshold for the first time, putting it in the No. 3 position by subscriber totals, behind Netflix and Comcast (News - Alert). It added 103,000 U.S. subscribers in the quarter, which represents a slight fall-off from Q4 2011, when it added 125,000.

Edited by Braden Becker
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