Dish Sales Miss Analyst Estimates as Pay-TV Users Defect

Network Lost 23,000 TV Subscribers

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The company is under pressure to wring profits from streaming service Sling TV.
The company is under pressure to wring profits from streaming service Sling TV. Credit: Courtesy Dish
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Dish Network, the second-largest U.S. satellite-TV provider, behind AT&T's DirecTV, posted third-quarter revenue that missed analysts' estimates as more subscribers canceled service.

The company lost about 23,000 TV customers, compared with a loss of 12,000 a year earlier.

The bigger question for Dish may be less about its operating results and more about Chairman Charlie Ergen's next move. The billionaire needs to decide what to do with his $50 billion supply of airwaves after U.S. regulators ruled he couldn't buy some on the cheap, nudging his goal of building a nationwide wireless carrier further out of reach. Last month, Dish forfeited $3.3 billion of those airwaves, and now faces a January deadline to file an application with the Federal Communications Commission to participate in another auction.

With its pay-TV business slowing, Mr. Ergen is also under pressure to wring profit from Sling TV, its online-video subscription service, in a crowded field of more-established players like Netflix, Hulu and Amazon.

The average TV bill was $86.33, compared with $84.39 a year earlier. Analysts projected an average bill of $88.10.

Dish includes Sling TV subscribers in its pay-TV count though doesn't break out the number. The streaming TV service launched in February featuring a 20-channel basic selection that starts at $20 a month. While the online subscriber gains help offset the slowdown in satellite users, from a revenue standpoint Sling users contribute less than half the amount of a satellite-TV customer.

The conventional pay-TV industry, including Dish, is facing threats from online-streaming services like Netflix and Amazon as consumers seek cheaper alternatives to big TV packages. The pressure is compounded by rising programming costs for rights to sports and other popular shows.

Earnings were 42 cents a share, the Englewood, Colo.-based company said Monday in a statement. Analysts predicted 41 cents, the average of estimates compiled by Bloomberg. Sales rose 1.4% to $3.73 billion, compared with projections for $3.79 billion.

Dish shares had dropped 13% this year through Friday, also amid disappointments including shelved talks to merge with No. 3 wireless carrier T-Mobile. Dish climbed 26% last year.

-- Bloomberg News

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