DISH Network Corp.
(
DISH
), the second largest satellite television provider in the U.S.,
announced in a regulatory filing that the company has lost 10,000
net subscribers in the second quarter of 2012.
DISH added 665,000 new customers and lost 675,000 customers in
the second quarter of 2012, thus taking the total subscriber base
to 14.06 million. The result is significant for the company as it
had lost 135,000 customers in the same quarter of last year,
reflecting 92.6% improvement in its net subscriber base. However,
its churn rate had increased to 1.6% from 1.35% in the first
quarter 2012.
During the second and third quarter of 2011, the company lost
about 250,000 subscribers. However, the trend reversed after that
as the company gained 126,000 net subscribers in the fourth quarter
2011 and first quarter 2012. We believe that this improved result
is based on the company's decision to offer Blockbuster movie
passes to all new and existing DISH Network customers.
Blockbuster movie passes, during a two-year subscription period,
allow DISH customers to receive DVD and video games by mail as well
as allow them to stream of thousands of movies and TV shows.
DISH is awaiting Federal Communications Commission's (FCC)
approval to get the license to establish a wireless broadband
network, which if completed will allow the company to combine
Blockbuster's movie streaming services and offer a highly
innovative bundled service. This will not only lead to subscriber
addition but will also help DISH to withstand pressure from
Verizon Communication Inc.'s
(
VZ
) FiOS TV.
The current Zacks Consensus Estimate for DISH Network Corp. is
pegged at 68 cents for the second quarter with a growth rate
estimate of (8.98%). For 2012 and 2013, the Zacks Consensus
Estimates stand at $2.73 and $2.79 with a growth rate of (5.49%)
and 2.20%, respectively.
Recommendation
Currently, DISH Network has a Zacks #3 Rank, implying a
short-term Hold rating on the stock. We are also maintaining our
long-term Neutral recommendation on the company's shares.
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