Dish beats profit estimates, expects more subscriber losses

By Sheila Dang and Akanksha Rana

(Reuters) - Dish Network Corp beat Wall Street estimates for quarterly profit on Wednesday, as the U.S. satellite TV provider benefited from lower programming costs due to a blackout of Univision channels.

Shares of Dish were up 1 percent to $31.84 in afternoon trading.

Dish shed a net 367,000 satellite subscribers during the third quarter, much higher than a consensus estimate of 232,000 net customer losses, according to research firm FactSet.

Customers who cancelled their satellite service due to the Univision blackout accounted for roughly half of the subscriber losses, said Dish Chief Executive W. Erik Carlson during a conference call with analysts.

 

Last week, premium channel HBO went dark on Dish after a disagreement over a new distribution deal with HBO's owner AT&T Inc .

Dish Chairman Charlie Ergen said during the call the dispute hinged on AT&T requiring Dish to pay based on a minimum number of subscribers.

"That would be malpractice," Ergen said. "There's no company that would sign up to a deal like that."

Dish said it expects to lose subscribers next quarter due to the HBO blackout but did not know how big the impact will be.

AT&T won a court battle in June to close its acquisition of Time Warner, then the owner of HBO, and will head back to court next month as the Justice Department appeals the deal approval. The department had argued the merger would result in higher prices for other pay-TV companies.

Dish, which has been stockpiling licenses for wireless spectrum, or airwaves that carry data, said it was on track to build an Internet of Things wireless network, and it is placing antennas on towers this year.

The company's streaming video service Sling TV added just 26,000 subscribers during the quarter, below analyst expectations of 71,000 additions, according to FactSet.

Dish has tried to lure viewers to its $25-per-month Sling TV as it battles cord-cutting in its satellite TV services, with audiences shifting to services like Netflix .

Net income attributable to Dish rose to $432 million, or 82 cents per share, in the third quarter ended Sept. 30 from $297 million, or 57 cents per share, in the year-ago quarter.

Revenue fell to $3.40 billion from $3.58 billion in the prior-year quarter. Analysts had expected the company to report revenue of $3.397 billion, according to Refinitiv data.

(Reporting by Akanksha Rana in Bengaluru and Sheila Dang in New York; editing by Patrick Graham and Cynthia Osterman)