DENVER—Dish Network Corp. said Monday its first-quarter net income rose 65 percent even though new subscriber growth of its satellite television service plunged on the languishing economy and stiffer competition.
In a Securities and Exchange Commission filing, the company also cited satellite launch delays and problems within its operations as factors that dampened growth.
For the quarter that ended March 31, EchoStar reported net income of $259 million, or 58 cents a share, compared with net income of $157 million, or 35 cents a share, in the first quarter of 2007. Revenue totaled $2.84 billion, up 7.6 percent from $2.64 billion a year ago.
The results beat estimates from analysts surveyed by Thomson Financial, who had predicted net income of 52 cents a share on revenue of $2.83 billion.
Subscribers totaled 13.8 million, up 3 percent from the end of March 2007. However, the net total of new subscribers was 35,000, down 88.7 percent from the 310,000 net new subscribers in the first quarter of 2007.
The number of customers who stopped service, measured as a churn rate by the industry, increased to 1.68 percent from 1.46 percent in the year-ago quarter.
“Subscriber growth has been affected by worsening economic conditions, including the slowdown in new housing starts as well as by operational inefficiencies at Dish Network, signal piracy and other forms of fraud,” Dish Network said in its filing.
Average revenue per subscriber was $67.93 for the quarter, up 5.9 percent from the first quarter of 2007, while the average acquisition cost per new subscriber was $709, up 6.9 percent.
Janco Partners analyst April Horace said the number of net new subscribers may disappoint investors as Wall Street had estimated the total at 60,000 for the quarter.
Dish Network should see an improvement in subscribers in the second quarter when it will begin serving all of AT&T Corp.’s satellite television customers, she noted. Previously, AT&T resold services both from Dish Network and rival DirecTV.
Dish Network, the nation’s second-largest satellite television provider, was spun off in January from EchoStar Communications Corp., which retained equipment operations such as recording devices. Both companies, which are based in suburban Englewood, are controlled by Charlie Ergen.
EchoStar was scheduled to report its first-quarter results before the market opened Tuesday.
Dish Network said some financial results benefited from the spinoff such as reduced depreciation, amortization and expenses.
Dish Network released its results after the market closed Monday. Its stock closed up 6 cents at $30.45 a share on Monday.
Last week, DirecTV Group Inc., the No. 1 satellite TV provider, said it added 275,000 net U.S. subscribers and ended the first quarter with 17.1 million customers, an increase of 5.2 percent.
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