Shares of Dish Network (DISH) were taking a dive today after the satellite TV company badly missed estimates on the bottom line and announced the surprise resignation of CEO Erik Carlson. Hamid Akhavan, the CEO of EchoStar, will be the CEO of Dish as the two companies look forward to an upcoming merger.
The stock was down 33.9% as of 2:29 p.m. ET on the news.
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Dish is losing the signal
As expected, revenue in the second quarter fell from $4.1 billion in the quarter to a year ago to $3.7 billion, missing the consensus of $3.72 billion, as Dish lost 64,000 subscribers in line with a broader decline in the pay-TV industry.
Dish said it finished the quarter with 8.84 million pay-TV subscribers, including 6.72 million for Dish TV and 2.12 million for Sling TV. The company's newer wireless business is also struggling, losing 225,000 subscribers in the third quarter to finish with 7.5 million wireless subscribers.
The real problem was on the bottom line, where the company reported a loss of $0.26 per share as costs rose even as revenue dropped. That compared to a per-share profit of $0.65 in the quarter a year ago and the consensus of a per-share profit of $0.04.
Separately, the company said it was selling some spectrum assets in Puerto Rico and the U.S. Virgin Islands to Liberty Latin America for $256 million, which seems to be a smart way to raise cash. The company also said that CEO Erik Carlson "intends to resign" as of Nov. 12 in preparation for the upcoming merger.
What's next for Dish?
With its CEO on the outs, declines in subscribers in both its pay-TV and wireless businesses, and losses mounting, it's easy to see why the stock is plunging today.
Investors may be looking forward to the merger with EchoStar, but it doesn't look like there's an easy way to turn around this slide. New CEO Akhavan will have a tough task ahead of him, and investors would be advised to avoid Dish stock as returning to subscriber growth won't be easy.
