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Dish Stock Plunges
Shares Down 10% After Mixed Earnings Report
Mike Farrell -- Multichannel News - August 9, 2010
Dish Network shares fell more than 10% in early trading Monday, after the second largest satellite TV service provider in the country reported a loss of 19,000 customers in the second quarter, a result that some investors feared could be a signal of future declines.
Dish stock was priced at $18.63 per share in early afternoon Monday, down $2.21 per share or 10.6%.
The customer losses come after strong subscriber growth from its chief rival - No. 1 satellite TV service provider DirecTV, which last week reported U.S. subscriber additions of about 100,000 customers. The Dish losses come after four consecutive quarters of customer growth. But investors apparent feared that the declines could signal a return to the big losses of 2008, when the satellite giant lost a total of 102,000 customers for the year, its first ever full year of subscriber declines.
Despite the subscriber declines, Dish reported strong financial results - revenue was up 9.1% to $3.17 billion and net income quadrupled to $257 million (57 cents per share) from $61 million (14 cents per share) a year ago.
In its 10-Q quarterly report filed Monday, Dish attributed the losses to "increased competitive pressures," which helped drive churn above analysts' expectations. Monthly subscriber churn was 1.79% in the period, well above analysts' consensus estimates of 1.56%.
On a conference call with analysts, executive vice president of sales, marketing and programming Tom Cullen said that churn was mainly impacted by the economy.
"Contrary to a lot of reports, we have not seen any significant improvement in the economy in general," Cullen said. "...As the value provider, we probably may feel that more than others."
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True FTA 39" Motorized Dish
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