DISH Network Corp.
) - the second-largest satellite operator in the U.S. after
) - declared first-quarter 2013 financial results where both its
top and bottom line missed the Zacks Consensus Estimate.
Most importantly, the company continues to maintain net
subscriber growth in the two successive quarters. In the first
quarter of 2013, DISH Network gained 36,000 net subscribers. At
the end of the first quarter of 2013, DISH Network had
approximately 14.092 million subscribers, up 0.1% year over
Quarterly GAAP net loss was $215.6 million or 47 cents per
share compared with a net income of $360.3 million or 80 cents
per share in the year-ago quarter. First-quarter 2013 income per
share of 47 cents was well below the Zacks Consensus Estimate of
an income of 61 cents.
Quarterly total revenue was approximately $3,555.2 million,
down 0.7% year over year and also below the Zacks Consensus
Estimate of $3,603 million. This poor performance was mainly due
to weak Equipment-related revenues.
Segment wise, quarterly Subscriber related revenues were
$3,352.6 million, up 4% year over year. Equipment and merchandise
sales & other revenues were $200.5 million, down 42.8% year
over year. Equipment sales, services, and other revenues from
EchoStar were $2.1 million, down 68.1% year over year.
Average monthly subscriber churn rate in the first quarter of
2012 was 1.47% compared with 1.35% in the prior-year quarter.
Average revenue per user in the reported quarter was $78.54
compared with $76.24 in the year-ago quarter. Average subscriber
acquisition cost in the first quarter of 2013 was $882 compared
with $747 in the year-ago quarter.
In the reported quarter, Subscriber-related expenses crept up
8.5% year over year to $1,911.6 million, driven by higher
programming content costs and expenses related to call center
operations. Total Subscriber acquisition cost increased 16.1%
year over year to $463.9 million. Depreciation and amortization
expenses were $234.3 million, up 12.3% year over year.
General and administrative expenses were down by 30.9% year
over year to $251.6 million. First-quarter 2013 operating profit
was $452.3 million compared with $572.4 million in the prior-year
quarter. Accordingly, quarterly EBITDA was just $686.6 million
compared with $781.1 million in the year-ago quarter.
During the first quarter of 2013, DISH Network generated
$686.5 million of cash from operations compared with $858.6
million in the prior-year period. Free cash flow (cash flow from
operations less capital expenditures) in the first quarter of
2013 was $375 million compared with $689.7 million in the
At the end of the first quarter of 2013, DISH Network had
$7,095.1 million of cash and marketable securities and $11,343.2
million of outstanding debt on its balance sheet compared with
$7,237.7 million of cash and marketable securities and $11,350.4
million of outstanding debt on its balance sheet at the end of
DISH Network currently has a Zacks Rank #3 (Hold).
DISH Network is slowly transforming itself from a low-priced
leader in the U.S. pay-TV industry to a premium service provider
in order to reduce its subscribers' churn rate. Moreover, the
plan to deploy triple-play services coupled with increased
rollout of its popular hopper devices will help the company to
not only drive subscriber growth but at the same time counter
stiff competition from
) U-Verse pay-TV service.
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