Englewood, Colo. –
Tuesday said first-quarter earnings dropped 34 percent from the
same period last year, when the company reported a one-time revenue boost from
The direct-to-home satellite-TV provider reported a profit of
$360.3 million, down from $549.4 million a year earlier, when the company
enjoyed a $340.7 million gain from the reversal of accrued expenses related to
a settlement agreement with TiVo.
Revenue rose 11 percent to $3.58 billion in the period, as
operating margin dropped to 16 percent from 30.5 percent.
The direct-to-home satellite TV service also said that its
decision to acquire video-rental chain Blockbuster out of bankruptcy last year
and launch a Blockbuster-branded streaming service in October helped to reverse
a trend of subscriber losses. The company also instituted a rate freeze at a
time when programming costs are rising in an effort to lure customers.
Dish added 104,000 net
subscribers during the first quarter, making the second quarter in a row of
subscriber growth, after dropping some 250,000 subscribers during the second
and third quarters of 2011. The company added 58,000 net subscribers in the
same period last year.
The cumulative subscriber base slipped 0.8 percent to 14.1
million from 14.2 million a year earlier. Churn dropped to 1.35 percent
compared with 1.47 percent a year earlier.
But the rate freeze may have contributed to a
weaker-than-anticipated average revenue per customer rise of $1.32 to $76.71
The Blockbuster unit contributed a modest $14 million operating
profit in the period. Dish has closed 500 Blockbuster stores in the United
States during the first quarter and plans to close 100 more during the current
quarter as it focuses on building the unit’s streaming video service.
Meanwhile, Dish’s set-top box producing sister company EchoStar
reported net income of $127 million, up from $17 million last year. Total
revenue for the quarter was $765 million, up 59 percent from $480 million a
EchoStar acquired rival Hughes Communications last June.