GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

DISH: Keeping Up With Its Valued Investors

February 22, 2014 | About:
abirk

abirk

3 followers

The satellite TV market is becoming more and more competitive now a days. There are several players in this market to gain a better position. So when it’s time to declare the financial results, these players face a great challenge. Performance will only be judged through those results as investors’ hard earned money is involved.

DISH Network Corporation (DISH), through its subsidiary DISH Network L.L.C., provides direct broadcast service to more than 14 million subscribers across the United States, with the highest quality programming and technology. The company is the nation's third largest pay-TV provider, and the second-largest direct broadcast satellite TV provider. Subscribers enjoy the largest high definition line-up with more than 200 national HD channels, the most international channels, and award-winning HD and DVR technology. This Fortune 200 company has more than 34,000 employees.

Performance of the Company

Recently, this Englewood, Colo based company declared mixed financial results for the fourth quarter of 2013. The company reported 2013 total revenue of $13.9 billion, compared to $13.2 billion in 2012, an increase of 5.5%. Net income in 2013 increased 26.8% to $807 million from $637 million in 2012. Diluted earnings per share were $1.76 in 2013, compared with $1.41 in 2012.

DISH added approximately 1,000 net Pay-TV subscribers during the year ended December 31, 2013, compared to the addition of approximately 89,000 net Pay-TV subscribers during the same period in 2012. It approximately added 1,000 net Pay-TV subscribers, compared to the addition of approximately 89,000 net Pay-TV subscribers in 2012. This decrease in subscribers is mainly due to increased competitive pressures. DISH’s Pay-TV churn rate for the year ended December 31, 2013 was 1.58% compared to 1.57% for the same period in 2012. Pay-TV average monthly revenue per subscriber (ARPU) was $80.37 during the year ended December 31, 2013 versus $76.98 during the same period in 2012.

During the year ended December 31, DISH added approximately 253,000 net Broadband subscribers and activated approximately 343,000 gross new Broadband subscribers, compared to the addition of approximately 78,000 net Broadband subscribers and activation of approximately 121,000 gross new Broadband subscribers respectively during the same period in 2012. Finally, the company ended 2013 with 436,000 Broadband subscribers compared to 183,000 total Broadband subscribers at the end of 2012.

Playing Strategically

On Tuesday, December 17, 2013, DISH partnered with Sprint Corporation (S) to jointly develop and deploy a fixed wireless broadband service, on a trial basis, in Corpus Christi, TX that will be available in the middle of 2014.

DISH has gained more subscribers in the Broadband market, and therefore to strengthen its foothold in the growing consumer satellite broadband market, on Feb. 20, 2014 the company entered into agreements to implement a transaction with EchoStar Corporation (SATS) and its subsidiaries. As per the company statement, the agreement “calls for DISH to transfer to EchoStar on March 1, 2014 five of its satellites (including related in-orbit incentives) and approximately $11 million in cash in exchange for shares of two series of preferred tracking stock, and for DISH to lease back certain satellite capacity on those five satellites. The tracking stock will represent an aggregate 80 percent economic interest in the residential retail satellite broadband business of EchoStar's subsidiary, Hughes Network Systems, LLC.”

Keeping customers’ demand in mind, DISH also introduced an innovative HD whole-home DVR called “Hopper” along with “Joey” which will enable users to watch TV shows and movies in 4 different rooms at the same time, and record 6 HD shows simultaneously. This is not the end; the company also introduced two new lightweight antennas that deliver an HD TV viewing experience for outdoor activities such as tailgating, RVing and camping.

Does DISH Have a Plan B?

DISH says that it is focusing on current partners, and not looking for new partnerships. Therefore, Dish and Southwest Airlines Co (LUV) announced their extension of the partnership and the "TV Flies Free" promotion recently. DISH will provide Southwest Customers using iOS, Android, and most other Internet-ready devices free access to nearly 20 live TV channels and up to 75 on-demand shows on the airline's nearly 440 Wi-Fi-enabled aircraft through December 31, 2014. Further, this satellite broadcaster announces the extension of iPad promotion through 2014.

Where customers are concerned, DISH faces stiff competition from DIRECTV (DTV). Now, they will jointly sell customized political ads.

Taking Indian Channels into U.S.A.

DISH is also providing international channels to its U.S. customers. STAR India (the leading media and entertainment company in India) partnered with DISH as the exclusive satellite-TV provider of STAR Plus HD, Life OK, and Movies OK to customers in the U.S.

On a Concluding Note

In this technological world, people are more interested in new and innovative technology. Right now wireless technology is booming. To create a better position in this wireless arena, DISH is investing billions of dollars to acquire wireless spectrum. Further, the company is also taking interest in the H-Block auction. DISH is playing very strategically to strengthen its position in this competitive world. Despite of mixed financial results, I am pretty bullish that this pay-TV provider won’t let its valued customers as well as investors down in the near future.


Rating: 4.5/5 (6 votes)

Voters:

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK