Dish Network Corp (DISH.O) reported lower net income in 2015 from a year earlier amid a drop in pay-TV subscriptions and a wireless airwaves auction-related expense, sending its shares down more than 4 percent on Thursday.
The No. 2 U.S. satellite TV provider said full-year net income attributable to the company tumbled 21 percent from a year earlier to $747.1 million, or $1.61 per share. This was below the average analyst estimate of $1.97 a share, according to Thomson Reuters I/B/E/S.
Dish said it incurred a $516 million expense related to a U.S Federal Communications Commission auction of wireless airwaves. An asset-impairment charge of $123 million also weighed on earnings.
Dish's shares were down 4.5 percent at $43.99 on the Nasdaq in afternoon trading.
As the pay-TV industry tackles subscriber losses, Dish has been trying to lure viewers to its cheaper $20-per-month Sling TV, an online streaming service with a smaller bundle of channels.
The company exited 2015 with about 13.9 million pay-TV subscribers including Sling TV, a decline of 81,000 subscribers from a year earlier.
Churn, or the rate at which subscribers defect to other services, grew in 2015 to 1.71 percent from 1.59 percent in the previous year.
Dish does not report Sling TV numbers.
MoffettNathanson analyst Craig Moffett estimated in a research note that Dish added 129,000 Sling TV subscribers and lost 141,000 television subscribers in the fourth quarter through Dec. 31.
As Dish's core business struggles, investors have wondered what Chief Executive Charlie Ergen will do with wireless airwaves that it has spent billions stockpiling over the years.
In the long-term, Dish has "a myriad of options to grow value in the company and some of that is clearly going to be driven by what we do with the spectrum," Ergen said during a conference call to discuss the company's earnings.
Dish has filed an application with the FCC to "potentially participate" in the government's upcoming 2016 airwaves auction that will start March 29, it said on Thursday.
Executives on the call declined to provide details on their strategy in the upcoming auction.
Dish, whose market capitalization is about $20 billion, has spectrum that could be worth nearly $45 billion on a pretax basis or about $32 billion after tax adjustments, according to Jefferies analyst Mike McCormack.
For the full year, revenue grew about 3 percent to $15.07 billion, above analysts' estimate of $15.02 billion.
Dish said net loss attributable to the company in the fourth quarter was $125.3 million, or 27 cents a share.
(Reporting by Anya George Tharakan in Bengaluru and Malathi Nayak in New York; Editing by Shounak Dasgupta and Bernadette Baum)