Dish Network 3rd-quarter Profit Falls

DEBORAH YAO

Dish Network Corp., the nation's second largest satellite TV operator, said Monday that net income fell 12 percent in the third quarter on the back of higher costs, including a reserve related to a lawsuit by TiVo Inc.

But the company also gained a surprisingly strong 241,000 net subscribers, the second consecutive increase in six quarters. Dish stepped up promotions to attract and retain subscribers, although such action hurt margins and ultimately, the bottom line.

Dish has been struggling to get its footing back after its strategy of being the low-cost provider didn't work as well as hoped when competitors began to aggressively discount as well. It is distracted by its patent infringement fight with TiVo and suffered signal theft and customer service problems.

In a surprise overture to investors Monday, Dish declared a one-time dividend of $2 per share, payable on Dec. 2 to shareholders of record on Nov. 20. Shares of Dish rose by $1, or 5.2 percent, to $20.15 in morning trading.

Sanford Bernstein analyst Craig Moffett said Dish turned in a mixed performance although the good outweighed the bad. The operator is getting its bearings back, but still isn't out of the woods.