August 3, 2017 / 10:23 AM / 3 years ago

Dish misses profit expectations but limits subscriber losses

(Reuters) - Dish Network Corp’s (DISH.O) shares declined on Thursday after the satellite television provider’s quarterly results missed analysts’ estimates, and its chief executive declined to give specifics on merger discussions, saying that the company was focused on building its new wireless network.

Dish has been buying up wireless airwaves, or spectrum, in recent years as its satellite business has come under pressure from cable as well as cheaper streaming options. Analysts have long thought the holdings could make Dish a natural fit for a tie-up with wireless carriers such as Verizon Communications (VZ.N) or T-Mobile US Inc (TMUS.O).

But the company is pursuing its own plan of putting the airwaves that it has acquired to use. Dish plans to build a low-cost wireless network by 2020 to meet the U.S. government’s deadline for deploying some of the spectrum. Dish said on the company’s post-earnings conference call that it was negotiating contracts with vendors and having discussions with tower companies and other partners.

Chief Executive Charlie Ergen said it was realistic to assume that Dish would need help in the second stage of a network buildout as standards for a next-generation wireless network, or 5G, evolve. 5G is expected to offer faster speeds and shorter response times.

Tech companies such as Inc (AMZN.O) could be potential partners in a network buildout. The two companies’ aspirations may be intersecting around connected devices, Citi analysts said in a research note in May.

Ergen declined to comment on whether there had been discussions with Amazon but said that tech companies could seek to have more control over connectivity going forward.

Dish shares were down 4.4 percent at $61.17 in late trading.

Dish said it lost about 196,000 subscribers to its satellite TV and Sling TV services in the second quarter. Dish launched the cheaper streaming service in 2015 to attract younger viewers who are shifting away from bigger television bundles.

The loss came in below analysts’ average expectation of 256,000 subscribers,¬†according to financial data and analytics firm FactSet.

FILE PHOTO - A Dish Network receiver hangs on a house in Somerville, Massachusetts, U.S. on February 21, 2017. REUTERS/Brian Snyder/File Photo

Net income attributable to Dish plunged 90 percent to $40 million or 9 cents per share in the quarter, hurt by litigation expenses, net of taxes, of $280 million.

Excluding one-time items, Dish earned 69 cents per share, missing analysts’ average estimate of 75 cents, according to Thomson Reuters I/B/E/S.

Dish said second-quarter revenue dipped nearly 6 percent to $3.64 billion as average revenue per user declined in its pay-TV business. Analysts on an average had expected $3.72 billion.

Reporting by Laharee Chatterjee in Bengaluru and Anjali Athavaley in New York; Editing by Sai Sachin Ravikumar and Nick Zieminski

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