Things were looking up for satellite TV provider Dish Networks in the first quarter of 2009, with sales and earnings on the rise, the company reported Monday.
Sales grew 2.1 percent to $2.91 billion for the quarter ended March 31 versus $2.84 billion for the same quarter in 2008. Earnings climbed to $313 million, or 70 cents a share, up from $259 million, or 58 cents a share a year ago.
Results were better than expected by analysts polled by Thomson Reuters, who predicted a profit of only 56 cents a share. Dish said the gains came from subscriber revenue as well as equipment sales to both customers and third parties.
Despite the gains, the Englewood, Colo.-based company saw a drop in the number of subscribers. A net total of about 94,000 people exited the satellite TV service during the first quarter, leaving Dish with a little more than 13.5 million customers. The company blamed the subscriber loss on a number of factors, including the sluggish economy and aggressive competition. The end of a distribution deal with AT&T this past January also hurt as that had boosted the number of subscribers by 17 percent for 2008.
Dish's outlook for 2009 is also uncertain. In its report, the company expressed concern over potential risks such as lower consumer spending, a continued loss of subscribers, and increased competition. Dish faces a more competitive playing field, not just from fellow satellite provider DirecTV, but also from cable and phone companies offering low-cost TV service.
Results were also less stellar for EchoStar, which Dish spun off last year. For the first quarter, EchoStar lost $645,000, or 1 cent per share, vs a profit of $5.7 million, or 6 cents per share, from a year ago. Sales dipped to $480 million, down 13.5 percent from $555 million in 2008's first quarter. Dish is dependent on EchoStar as its equipment supplier and would have to scramble to find new sources were EchoStar no longer able to meet its needs.