Dish gains subscribers, sets special dividend
Dish Network Corp, the No. 2 U.S. satellite TV provider, beat Wall Street forecasts by posting a gain of 241,000 subscribers in the third quarter and surprised investors with a plan to pay shareholders a special dividend of $2 a share.
Analysts at Bernstein Research had forecast Dish, which has been losing subscribers in recent quarters, would lose 9,000 subscribers while analysts at Kaufman Bros had expected Dish to add 30,000.
Dish did not give a clear reason in its early statement for its one-time dividend, but Bernstein's Craig Moffett said it was positive for investors.
While a far cry from a recurring dividend that would clearly be better, the return of cash to shareholders is nevertheless a very welcome development, Moffett said in a note to investors.
If only because DISH has been a reported suitor for any number of acquisitions (most recently Sirius XM earlier this year) and has been reticent about buying back stock in the past.
But the Englewood, Colorado company posted a worse-than-expected 13 percent decline in third-quarter profit, hurt by higher costs in winning subscribers and also by legal expenses from its patent fight with TiVo Inc.
Dish, which faces stiff competition from cable companies and larger satellite TV rival DirecTV Group, said net income fell to $80.5 million, or 18 cents a share, from $92 million, or 20 cents per share, a year earlier.
Excluding special items, including $132 million for TiVo litigation, the profit was 41 cents a share. That fell short of the analysts' average estimate of 43 cents. Revenue fell 1.5 percent to $2.89 billion.
In a long-standing legal battle, TiVo is suing Dish and sister company EchoStar Corp for patent infringement of its DVR technology. In September, a U.S. district court awarded TiVo nearly $200 million in damages, bringing the total it has received so far in the patent technology dispute to $400 million.
Dish has appealed although the judge warned that the company could face enhanced sanctions.
(Reporting by Franklin Paul and Yinka Adegoke; Editing by Derek Caney, Lisa Von Ahn, Dave Zimmerman)
© Copyright Thomson Reuters 2024. All rights reserved.