Dish Network posted strong earnings Monday, but a loss of subscribers could foreshadow problems in the future.
The Meridian, Colo.-based company's net income increased 30.3 percent to $335 million in the second quarter, based on revenue growth of 13.3 percent to $3.59 billion.
Dish Network delivered another quarter of strong growth in revenue and net income, Joe Clayton, president and CEO of Dish Network said in a statement. ...As we look forward to the second half of the year, we will focus on commercializing our technology, re-energizing our distribution channels and strengthening our brand image.
However, Dish Network has experienced problems maintaining customers. The company lost 111,000 subscribers from the year-earlier period, more than the 81,000 that were expected under a Bloomberg survey of analyst estimates. However, the immediate cost benefits of not having to add new subscribers helped contribute to quarterly earnings.
Despite the customer volume decline, investors seemed to be rewarding Dish Network based on their earnings. Shares were up 5.07 percent to $24.67 in mid-morning trading.
The flockaway from Dish Network is in contrast to what DirecTV had experienced. The El Segundo, Calif.-based company on Thursday announced net subscriber additions of 1.14 million compared to the prior-year period, with much of that growth taking place in Latin America.
However the company announced 327,000 net additions in the United States, which is largely attributable to the NFL Sunday Ticket Promo, which gives subscribers access to all football games for no additional charge.
Cable companies have shown generally positive results as well. Time Warner experienced what it called a terrific quarter, posting earnings of $822 million in the most recent quarter. The company attributed a lot of their success to the most recent Harry Potter Movie, but also credited higher subscription and advertising rates.
However, Comcast didn't do as well as suspected. The company posted $908 million in earnings last week, or 33 cents per diluted share. But analysts polled by Thomson Reuters were expecting Comcast to earn 39 cents a share.
Nonetheless, it still is adding subscribers. Comcast added 229,000 net customers and curtailed the decline of basic video customers, losing 165,000 subscribers compared to a loss of 275,000 in the same period last year. One thing going against Comcast was a new asset: NBCUniversal. The prime-time ratings for NBC have been struggling recently, trailing behind ABC, CBS and Fox.
AT&T and Verizon also saw growth in subscribers to their television services. AT&T posted a 176,000 net gain in AT&T U-verse TV subscribers, which now totals 3.6 million in service. Verizon's FiOS TV posted 131,000 net additions, with 4 million customers now subscribing.