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Dish Sees Net Drop 26% As Subs Increase

5/10/2010 11:41:24 AM Eastern
New York - Dish Networkreported Monday that first-quarter net income fell 26 percent to $230.9 million, from $312.7 million a year earlier.

The satellite-TV service said it added 237,000 net new subscribers in the first quarter, bringing its total to 14.3 million.

It was the fourth consecutive quarter of subscriber growth, due mostly to aggressive pricing and improved customer service.

The new-subscriber additions resulted in higher costs from marketing and equipment installations.

Revenue rose 5.2 percent to $3.06 billion, the company said. During the period, programming costs rose 5.8 percent from a year earlier.

Dish also reported subscriber churn fell to 1.4 percent in the period, its lowest point since the first quarter of 2003, while at the same time increasing its rate of revenue per subscriber.

Sister company Echostar, meanwhile, recorded a $72 million profit in the period, coming back from a $1 million loss a year-earlier. Revenue rose 31 percent to $627 million. Echostar manufacturers set-top boxes and Sling devices, and counts Dish as its largest customer.

Dish and EchoStar also faced legal expenses of $30.2 million in the quarter from a long-running patent dispute with TiVo over DVR technology.

TiVo sued EchoStar, Dish's sister company, in 2004 for patent infringement of its DVR technology, resulting in a jury decision against EchoStar. Dish continues to appeal the decision.

While the battle continues, analysts speculate it will probably end with a licensing agreement that calls for Dish to pay TiVo for each of its DVR-using subscribers.
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