Satellite television provider Dish Network and its former parent, EchoStar, reported fourth-quarter financial results on Monday.
Dish Network reported revenue of US$2.92 billion for the quarter ended Dec. 31, 2008, a 1 percent increase compared with $2.89 billion during the same period in 2007. Net income totaled $217 million, compared with $175 million during the same period last year.
For the year ended Dec. 31, 2008, Dish reported total revenue of $11.6 billion compared with $11.1 billion in 2007, an increase of 5 percent. Dish’s net income for the year totaled $903 million, compared with $756 million during the same period in 2007.
Dish lost approximately 102,000 net subscribers in the fourth quarter, giving the company approximately 13.7 million subscribers at year’s end. The number of net subscribers lost for the year was also approximately 102,000.
Dish’s stock was down 12.8 percent to $9.81 per share in mid-day trading Monday.
Dish Losing Market Share
A variety of factors conspired to suck customers away from Dish throughout 2008, and the fourth quarter was much worse than Wall Street had expected, said Steve Clement, an equity analyst with Pacific Crest Securities.
Dish faced increased competition from rival satellite TV company DirecTV and cable companies in 2008. Also, telephone companies such as Verizon Communications and AT&T have entered the market with television offerings, providing even more competition, Clement told the E-Commerce Times.
In addition, Dish’s management made it clear during the company’s Monday conference call that Dish wasn’t as aggressive in its marketing effort last year because it did not have confidence that it could sign up, connect and care for new customers at the appropriate levels, he said.
“[Dish] spent the year trying to fix their problems with their operations,” Clement said. “The management said they’re in a better position to pursue customers now.”
Recently, Dish has become more aggressive with its promotional pricing. In February, the company offered an introductory plan for $9.99 for six months.
However, Dish suffered another blow when it lost a substantial partnership with AT&T. Under the agreement, Dish was the only television service AT&T offered to its customers in areas where AT&T television service was not available.
Dish was replaced by DirecTV.
“AT&T went from using Dish exclusively to DirecTV,” Clement said. “That’s a substantial headwind Dish will face going forward. Nineteen percent of Dish’s gross subscriber adds in the fourth quarter were from the AT&T relationship.”
EchoStar Reports Q4 Results
EchoStar reported revenue of $496 million for the quarter ended Dec. 31, 2008, a 37 percent increase compared with $361 million during the same period in 2007.
EchoStar reported a net loss of $690 million, compared with a net loss of $45 million during the same period in 2007.
The net loss for the fourth quarter of 2008 includes the following impairments and net losses on investments: $247 million for goodwill related to the acquisition of Sling Media, $216 million for net losses on investments, $187 million related to satellite infrastructure and $4 million on other asset impairments.
For the year ended Dec. 31, 2008, EchoStar reported revenue of $2.2 billion, compared with $1.5 billion during 2007, an increase of 39 percent. EchoStar’s net loss for the year was $944 million, compared with $85 million last year.
EchoStar’s stock was down 8.5 percent to $14.99 per share in mid-day trading on Monday.