NEW YORK -- Dish Network Corp., the second-largest U.S. satellite TV provider, posted first-quarter profit that beat analysts' estimates, fueled by a price increase that helped counteract a decline in TV subscribers.
Net income doubled to $351.5 million, or 76 cents a share, from $175.9 million, or 38 cents, a year earlier, Dish said Monday in a statement. That topped the $195.3 million average of estimates compiled by Bloomberg. Revenue rose 3.6 percent to $3.72 billion, compared with analysts' projections for $3.73 billion.
Dish lost about 134,000 TV customers in the period compared with a gain of 40,000 a year earlier. The jump in defections came as some 21st Century Fox channels were disrupted during contract discussions early in the year. Dish's TV subscriber base fell to 13.8 million from 14.1 million a year earlier.
"There was a slight market-share shift to the cable companies that probably saw a benefit from the Fox dispute," said Amy Yong, an analyst with Macquarie Capital USA in New York.
Digital Access For Only $0.99
For the most comprehensive local coverage, subscribe today.
The user losses underscore challenges facing the Englewood, Colo.-based company from alternative providers such as Netflix, Hulu and Amazon.com. In February, Dish started Sling TV, an online streaming service offering 20 channels of live programs and sports for $20 a month aimed at younger viewers.
Dish co-founder and Chief Executive Officer Charlie Ergen created Sling TV's "skinny bundle" as a response to the decline in subscribers willing to pay for a full-package of channels. While Dish didn't disclose subscriber numbers for the service, Ergen said on a conference call with analysts that he was encouraged by what he's seen.
"We're excited about where
it's going to go, and I think it's going to be meaningful revenue," Ergen said.
Roger Lynch, CEO of Sling TV, said the service is popular with people who don't have cable and to a smaller degree people who have pay-TV at home and want supplemental service on their mobile device.
While live TV is the main feature of Sling, a majority of viewers are watching video on demand, Lynch said on the call.
Under Ergen, Dish has amassed an estimated $50 billion worth of airwaves, though not without controversy. Ergen is under pressure to deliver a broader strategy that best suits the company's spectrum holdings and mobile TV ambitions.
Auctions are a "core skill" at Dish, Ergen said on the call. He expects to participate at a high level in the proposed 600-megahertz incentive auction coming as early as next year, he said.
Dish needs to build a network or in some way use an existing network to put its airwaves to use. The company was outbid by SoftBank Corp. two years ago when it tried to buy Sprint Corp. Since then Ergen has said he's interested in T-Mobile US Inc. and has talked to Deutsche Telekom AG, which owns about two-thirds of the No. 4 U.S. wireless carrier.
Still, without phone or Internet service, Dish can't compete head-to-head with cable or phone providers that offer bigger packages of services.
"Dish is a one-trick pony, which is why Charlie Ergen has placed a big bet on wireless spectrum," said Paul Sweeney, an analyst with Bloomberg Intelligence.