DISH Posts a Big Uptick in Subscriber Revenues

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DISH Network Corporation (NASDAQ: DISH) yesterday reported revenue totaling $3.17 billion for the quarter ending September 30, 2019, compared to $3.40 billion for the corresponding period in 2018.

Net income attributable to DISH Network totaled $353 million for the third quarter 2019, compared to net income of $432 million from the year-ago quarter. Diluted earnings per share for the quarter ending September 30, 2019 were $0.66, compared with $0.82 during the same period in 2018.

“What are we to make of DISH’s much-better-than-expected subscriber results in Q3?” asked Craig Moffett of MoffettNathanson. “Yes, they still lost satellite subscribers, but not many (only 66K). And they added enough Sling TV subscribers (+214K) to post a positive number for Pay TV overall,” he said.

By one line of thinking, according to Moffett, this is a sign that DISH has finally gotten close to an equilibrium, where their most vulnerable subscribers have already left, and where the subscribers who remain are now more rural and more committed. 

The company closed the third quarter with 12.18 million total Pay-TV subscribers, including 9.49 million DISH TV subscribers and 2.69 million Sling TV subscribers. Net pay-TV subscribers increased by approximately 148,000 subscribers in the third quarter, compared to a decline of approximately 341,000 in the third quarter 2018.

DISH Network’s 2019 year-to-date revenue totaled $9.57 billion, compared to $10.31 billion in revenue from the same period last year. In the first nine months of 2019, net income attributable to DISH Network totaled $1.01 billion, compared with $1.24 billion during the same period last year.

Diluted earnings per share were $1.91 for the first nine months of 2019, compared with $2.35 during the same period in 2018.

Jennifer Fritzsche, Managing Director of Wells Fargo Securities, noted that, along with the report, DISH made two strategic hires that would suggest its wireless ambitions are seemingly very real. “Specifically, DISH hired Stephen Bye (former S executive and hired away from PE backed Connectivity Wireless), to be its Chief Commercial Officer,” she said. “We know Bye and believe he is one of the top wireless visionaries in the space. He has strong views on spectrum and network design. In our view, he will be a significant asset to DISH’s as it forms its forward looking wireless strategy.”

DISH also hired Marc Rouanne as its Chief Network Officer. Fritzsche said he brings in much experience from the wireless equipment side of the house, having served in senior roles at Nokia, Alcatel-Lucent, and Mobile Networks. Much of his work and experience has centered around the software and O-RAN (open radio access network) space – which we believe will be the lynchpin in DISH’s 5G buildout strategy.

“We call these two hires out,” she said, “because we do believe it adds more credibility to the DISH wireless story. While we do not actively follow DISH, the ‘realness’ around its wireless story is key to getting the S/TMUS merger approved in our view.” 

As Wells Fargo sees it, a key concern with the State AGs fighting the S/TMUS merger is four national wireless players going to three will create a more difficult pricing environment for the consumer. “As DISH builds out its wireless bench and depth of talent, we believe they will offer a more tangible plan of buildout which could lessen these concerns,” Frizsche said.

November 8, 2019

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