DISH Misses on Q1 Earnings, Beats Rev - Analyst Blog

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DISH Network Corp. ( DISH ), the second largest satellite TV operator in the U.S. after DIRECTV ( DTV ), declared first-quarter 2014 financial results, where the bottom line missed the Zacks Consensus Estimate but the top line outpaced the same.   

At the end of the first quarter of 2014, DISH Network had approximately 14.097 million pay-TV subscribers, up 0.04% year over year. The company gained 41,000 pay-TV subscribers and 53,000 broadband subscribers in the same quarter. At the end of the quarter under review, DISH Network had 489,000 broadband subscribers.

Quarterly net income came in at $175.9 million or 38 cents per share compared with $215.6 million or 47 cents per share in the year-ago quarter. Earnings also missed the Zacks Consensus Estimate of 43 cents. Quarterly total revenue stood at approximately $3,594.2 million, up 6.1% year over year and also outpaced the Zacks Consensus Estimate of $3,581 million.

Segment wise, quarterly Subscriber related revenues were $3,556.2 million, up 5.8% year over year. Equipment and merchandise sales & other revenues totaled $22.2 million, down 13.5% from the year-ago quarter. Equipment sales, services and other revenues from EchoStar were $15.8 million, up 86.7% year over year.

Average monthly subscriber churn pay-TV rate in the first quarter of 2014 was 1.42% compared with 1.47% in the prior-year quarter. Average revenue per user was $82.36 against $78.44 in the year-ago quarter. Average subscriber acquisition cost in the first quarter of 2014 was $862 compared with $882 in the year-ago quarter.

In the reported quarter, Subscriber-related expenses crept up 9.3% year over year to $2,069.1 million. Total Subscriber acquisition costs fell 3.3% year over year to $449.1 million. Depreciation and amortization expenses were $249.2 million, up 7.6% from the prior-year quarter. General and administrative expenses were down 13.2% year over year to $178.3 million. First-quarter 2014 operating profit was $446.3 million compared with $451.6 million in the prior-year quarter. Accordingly, quarterly EBITDA was $695.4 million as against $698.1 million in the year-ago quarter.

At the end of the first quarter of 2014, DISH Network generated $670.7 million of cash from operations compared with $708.4 million in the prior-year period. Free cash flow (cash flow from operations less capital expenditures) totaled $383.1 million compared with $397.5 million in the year-ago period.

At the end of the first quarter of 2014, DISH Network had $8,961.5 million of cash and marketable securities and $12,570.2 million of outstanding debt on its balance sheet compared with $9,739.4 million and $12,616 million, respectively, at the end of 2013.

Our Take

DISH Network is transforming itself from a low-priced leader in the U.S. pay-TV industry to a premium service provider in order to check subscriber churn. Moreover, the plan to deploy triple-play services coupled with the increased rollout of its popular hopper devices will help the company drive subscriber growth and counter stiff competition from Netflix, Inc. ( NFLX ) and AT&T Inc. 's ( T ) U-Verse pay-TV service.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: DISH , DTV , NFLX , T

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