Dish Network Says Some Costs May Grow

Still, shares are up 3.2%.
By Robert Holmes ,

Dish Network

(DISH) - Get Report

posted first-quarter results that got past expectations, but the company issued cautious comments about slowing growth and higher customer attrition.

The Englewood, Colo., satellite TV provider posted first-quarter earnings of $259 million, or 58 cents a share, up from $157 million, or 35 cents a share, in the year-ago quarter. Revenue totaled $2.84 billion, up 7.6% from a year ago.

Analysts were expecting Dish to earn 52 cents a share on revenue of $2.83 billion, according to Thomson Reuters.

Dish said in a filing with

Securities and Exchange Commission

that it faces intense and increasing competition from satellite and cable television providers such as

DirecTV

(DTV)

and

Comcast

(CMCSA) - Get Report

, as well as new competitors, including telephone companies such as

AT&T

(T) - Get Report

.

"Our competitors are increasingly offering video service bundled with 2-way high-speed Internet access and telephone services that consumers may find attractive and which are likely to further increase competition," the company said. "We also expect to face increasing competition from content and other providers who distribute video services directly to consumers over the Internet."

Dish said that it added approximately 35,000 net new subscribers during the first quarter, giving the company about 13.8 million subscribers. The average revenue per subscriber jumped to $67.93 from $64.17 in the year-ago quarter.

At the same time, monthly churn, which measures the number of subscribers who quit the service, grew to 1.68% from 1.46% in the first quarter of 2007. Meanwhile, subscriber acquisition costs rose to $709 from $663 last year.

Ominously, Dish said that subscriber growth may continue to decrease and turnover may accelerate due to a variety of factors, including competition and worsening economic conditions.

As the company has said in the past, Dish reiterated that subscriber acquisition and retention costs may increase. However, Dish added that "the competitive environment may require us to increase promotional and retention spending or accept lower subscriber acquisitions and higher subscriber churn; we may also have difficulty controlling other costs of continuing to maintain and grow our subscriber base."

Still, shares of Dish were lately up 3.2% to $31.42. DirecTV was down 0.2% at $27.42.

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