Dish Sheds 116,000 TV Customers in Q3, Profit Jumps 57% but Misses Expectations

Dish Network posted its tenth straight quarter of pay-TV subscriber losses — dropping a net 116,000 satellite video and Sling TV customers for the September quarter, as it continues to struggle against headwinds of fierce competition and cord-cutting trends.

The Charlie Ergen-led company boosted net income 57%, to $307 million for the third quarter of 2016, with diluted earnings per share of 64 cents, falling short of Wall Street forecasts of EPS of 68 cents. Dish reported revenue of $3.75 billion for the most recent quarter, in line with analyst expectations, compared with $3.73 billion in Q3 2015.

But it was the worst Q3 sub loss for Dish on record, after Dish shed approximately 23,000 in the third quarter of 2015, and follows the satcaster’s biggest quarterly loss ever in Q2 (of 281,000). Dish’s pay-TV figures combine satellite and the Sling TV over-the-top “skinny” bundles, indicating an accelerating decline in Dish’s satellite base.

And Dish’s Sling TV, estimated to have about 1 million subs at the end of Q3, will soon face serious and sustained competition from AT&T’s DirecTV. The telco later this month plans to launch the internet-delivered DirecTV Now, with a core package of 100-plus channels for $35 per month. Sling’s $20-per-month OTT bundle includes about 30 channels.

Dish closed out Q3 with 13.643 million pay-TV subscribers, compared with 13.909 million in the year-ago period.

During the third quarter, Dish lost 320,000 traditional satellite subscribers in Q3 — and has lost 949,000 over the past year, down 8.1% year over year, according to estimates by MoffetNathanson analyst Craig Moffett. That’s been only partially offset by Sling TV, which Moffett estimated added 204,000 subs in Q3 and 517,000 subscribers over the past four quarters.

Average revenue per pay-TV customer for the third quarter totaled $89.44 per month, up from $86.33 in the year-earlier period. Pay-TV subscriber churn rate was 2.11% versus 1.86% in the third quarter of 2015.

On broadband, Dish lost 20,000 net satellite broadband subscribers in the third quarter, dropping its broadband subscriber base to approximately 593,000.

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