Dish Network: fewer subscribers, higher profit

Dish Network Corp. posted another loss of subscribers from its slowly dwindling satellite-TV business, even as larger competitor DirecTV adds to its base.

Investors, however, were cheered by the announcement of a $2 per share special dividend.

Dish shares rose 80 cents, or 3.4 percent, to $24.28 in morning trading Monday after rising as high as $25.15 earlier, reflecting a calculation by investors that the dividend didn't quite make up for the results, which missed analyst expectations.

Dish declared a similar $2 per share special dividend in 2009. It doesn't pay a regular dividend.

Dish's subscriber losses translated into higher net income for the quarter, as it avoided the short-term cost of getting new subscribers set up with dishes and set-top boxes.

The Englewood, Colo., company said its net income climbed 30 percent to $319.1 million, or 71 cents per share, in the three months that ended Sept. 30. That's up from $244.9 million, or 55 cents per share, a year ago.

Analysts polled by FactSet were on average expecting earnings of 74 cents per share.

Revenue rose 12 percent to $3.6 billion from $3.2 billion a year ago, chiefly because of the acquisition of the Blockbuster video-store chain in April. Analysts were on average expecting revenue of $3.64 billion.

The period was the first full quarter of results for Blockbuster after the acquisition. The division essentially broke even on $347 million in revenue.

Dish lost a net 111,000 subscribers in the quarter. That was mainly because fewer new subscribers signed up, rather than accelerated losses. But the loss rate is still high, something the company blames on competitor's aggressive promotions.

Analyst Mike McCormack at Nomura Securities also noted that the average monthly fee per subscriber was just $76.99, well below his estimate of $78.84, saying that was "of particular concern."

DirecTV Group Inc. last week reported adding a record 327,000 subscribers in the third quarter, greatly helped by its exclusive NFL Sunday Ticket.

Dish ended the quarter with 13.9 million subscribers, the same number it had two years ago. That makes it the third-largest provider of paid TV signals to U.S. households. DirecTV had 19.8 million, making it second only to Comcast Corp. as a pay-TV provider.

The dividend will be paid Dec. 1 to shareholders of record on Nov. 17.