Earnings: DISH Q1 Revs Up 7.5 Percent; Sub Growth Slows On Competition, Economy Hurts Churn

This story was written by Joseph Weisenthal.
Satellite operator DISH reported Q1 revenue of $2.84 billion, a 7.5 percent increase from $2.64 billion in the year-ago quarter. Net income was up 64 percent to $258 million ($.57 per share) from $157 million ($.35 per share). While the numbers are going up, subscriber growth is slowing considerably: "Slower subscriber growth rates continued in the first quarter of 2008, during which we added 35,000 net new DISH Network subscribers. This rate of growth was substantially lower than we have historically experienced on a quarterly basis...." The reasons: "We believe that this declining subscriber growth has been driven in part by competitive factors including the expansion of fiber-based pay TV providers, the effectiveness of certain competitors' promotional offers, the number of markets in which competitors offer local HD channels, and their aggressive marketing of these differences." The company also cited satellite launch issues affecting HD capacity. Some other metrics:

-- ARPU was up 5.9 percent to $67.93.
-- SAC was up 6.9 percent to $709
-- Churn grew to 1.68 percent from 1.46 percent. Going forward: "We believe our subscriber churn rate has been and is likely to continue to be negatively impacted by a number of factors, including, but not limited to, the factors described above impacting subscriber additions, an increase in non-pay disconnects primarily resulting from adverse economic conditions and continuing effects of customer commitment expirations."

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By Joseph Weisenthal