The newly named Dish Network (Nasdaq: DISH), or the portion that remains, has given us some good news and some not-so-good news. The company, which was restructured and renamed at the beginning of this year after previously operating as EchoStar Communications, increased its profit in the December quarter. But in an area that tends to distress the market, the company saw its subscriber growth slip somewhat.
For the quarter, Dish recorded earnings of $175 million, or $0.39 per share (basic EPS), up 14% on the net income line from $153 million and $0.35 a share a year earlier. Revenue was up 12% to $2.89 billion. The dart throwers had anticipated about $0.06 higher on the per-share line.
And the market Tuesday morning was less then enthralled by the company's report that it had added just 85,000 new customers in the December period, down from 110,000 for the third quarter. The slippage was apparently tied to a number of factors, including satellite launch delays, intensified marketing of high-definition (HD) channels by the company's competitors, and a general pullback in consumer spending.
At the beginning of this year, Dish spun off its technology and set-top box businesses to EchoStar (Nasdaq: SATS). Last fall's news of the planned split resulted in thus-far-unfulfilled rumors of an acquisition of Dish by AT&T (NYSE: T).
Following the spin-off, Dish is concentrating on a video world that includes its fellow satellite provider DirecTV (NYSE: DTV), along with telephone companies Verizon (NYSE: VZ) and AT&T, both of which are aggressively marketing their own triple-play packages of voice, television, and high-speed data. And Dish also competes with the cable operators, including Comcast (Nasdaq: CMCSA) and Time Warner Cable (NYSE: TWC). As the economy has slowed and competition within the broadly defined group has increased, a number of these companies have seen their subscriber addition rates decline.
My inclination, given the nature of Dish's competition and the ongoing slide in the economy, and despite Dish CEO Charlie Ergen's lofty status as a University of Tennessee graduate, is to advise my Foolish friends to give the stock something of a wide berth for now. The company's day will come, but that day doesn't appear to be upon us.
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