Dish Network adds subscribers, beats Street

Thu Feb 23, 2012 12:22pm EST

An advertising sign in the lobby of the corporate headquarters of Dish Network shows current packages in the Denver suburb of Englewood, Colorado April 6, 2011. REUTERS/Rick Wilking

An advertising sign in the lobby of the corporate headquarters of Dish Network shows current packages in the Denver suburb of Englewood, Colorado April 6, 2011.

Credit: Reuters/Rick Wilking

(Reuters) - Dish Network Corp's (DISH.O) fourth-quarter results topped Wall Street estimates, helped by its new Blockbuster subscription service.

The second-largest satellite TV company behind DirecTV (DTV.O) has been trying to reinvent itself after losing about 250,000 subscribers during the second and third quarters of 2011.

It bought the failed Blockbuster video rental chain in a bankruptcy auction last April and wants to get into the wireless business.

The company did not provide specific earnings outlook for 2012 but Chief Executive Joe Clayton said on a conference call he expects net income to remain roughly flat this year.

Dish added about 22,000 subscribers in the quarter, compared with the estimate of 5,000 subscriber additions, as compiled by StreetAccount data.

The company debuted the Blockbuster Movie Pass last fall, a subscription plan that costs $10 a month to watch movies on the Internet and rent movies and video games by mail and in stores. Clayton said the new service the helped stem subscriber declines.

Blockbuster stores are not faring as well. The company plans to shutter 500 U.S. stores in the first half of this year because many of them are unprofitable.

WAITING ON WIRELESS

Dish said it needs an approval from the U.S. Federal Communications Commission before it can enter the wireless market.

Dish has spent nearly $3 billion on wireless spectrum and assets in the last year as it seeks to diversify its business beyond satellite pay-television.

Chairman Charlie Ergen told analysts on Thursday that there is an "80 percent chance" Dish could succeed with its wireless strategy.

But if Dish does not get permission from the U.S. government, he said Dish would have to write down the assets it bought for this purpose, DBSD and TerreStar.

"They probably wouldn't be worth the $3 billion we paid for them," Ergen said.

The FCC should respond to some of Dish's requests by March 12, Ergen said. Analysts are concerned the government agency may drag out the process.

Dish's net income rose to $313 million, or 70 cents a share, compared to $252 million, or 56 cents a share, a year earlier. This beat analysts' earnings estimates of 61 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 13 percent to $3.63 billion, beating revenue estimates of $3.62 billion.

Shares of the company were up 32 cents, or 1 percent, at $29.48 on the Nasdaq.

(Additional reporting by Sruthi Ramakrishnan in Bangalore; Editing by Derek Caney)