Dish Network Corp., the second-largest U.S. satellite-television provider, fell the most in more than a year in U.S. trading after losing subscribers last quarter.
The Douglas County-based company, which competes with larger rival DirecTV, said Monday it lost 19,000 subscribers in the second quarter. Todd Mitchell, an analyst at Kaufman Bros. LP in New York, had predicted a gain of 130,000 subscribers.
Dish, which had offered discounts and run promotions such as “Free HD for Life” to lure users, attributed the decline to competitive pressures and customers rolling off their contracts. Churn, or the fraction of users who cancel their service each month, widened to 1.78 percent from 1.73 percent a year earlier.
“Churn is a real issue. You’re seeing a lot of former subscribers coming off Dish’s $19.99 offer and not coming back,” Mitchell said, referring to a promotion that had helped Dish win customers in recent years. “Competition has hurt them, and clearly DirecTV is doing better.”
DirecTV added 100,000 U.S. subscribers in the quarter, and Comcast Corp., the largest U.S. cable operator, added 394,000 digital-video customers.
Dish fell $2.12, or 10 percent, to $18.72 in Nasdaq Stock Market trading, for the biggest drop since March 2, 2009. The stock has declined 9.9 percent this year.
A weak U.S. economy also contributed to higher churn rates, Tom Cullen, an executive vice president, said on the company’s conference call with analysts.
