UPDATED with exec comments from call: Satellite broadcaster Dish Network posted profit and revenue gains for last quarter, beating Wall Street estimates and seeing its stock pop more than 3% in early trade. It reversed course and closed down more than 4% as the market digested the massive challenge of the company’s march to build out a retail wireless network even as its video business is in secular decline.
Revenue totaled $4.6 billion for the quarter, up from $3.24 billion the year before. Diluted earnings per share came in at $1.24 for the fourth quarter, compared with $0.69. Net income was $733 million versus $389 million from the year-ago quarter.
Net pay TV subscribers fell by approximately 133,000 in the fourth quarter – still heading down but narrowed compared to a decrease of approximately 194,000 in the year-ago quarter. The company said it ended the quarter with 11.29 million pay TV subs, including 8.82 million at Dish TV and 2.47 million for Sling TV.
Retail wireless net subscribers decreased by approximately 363,000 in the fourth quarter, compared to a net decrease of 212,000 in the third quarter, ending the year with close to 9.1 million retail wireless subs. Dish jumpstarted its new era in wireless by acquiring Sprint’s prepaid wireless business Boost Mobile from T-Mobile as part of a merger between the telecom giants. It’s invested billions in spectrum and other holdings to push Dish into what founder and chairman Charlie Ergen calls its third key transition.
“The transition time is always the hardest. If you can get through that, you can really grow the business he said. “In 1980s, the transition was to survive. It took us about three years to be a retail company and get past the survival phase.”
The came the shift from “big dishes to little dishes” and the company launched its first satellite in 1995 to compete with the cable industry. The current wireless transformation has been over a decade in the making, he said, as Dish accumulated spectrum and critical mass.
“As we enter 2021, we have everything we need to build this one-of-a-kind 5G network. Now it’s all about execution,” Ergen said.
He outlined a number of risks, including a new one. T-Mobile has notified the company of plans to shut down its legacy 3G network in January of 2022, which means it will have to migrate customers.
He and other execs said Dish plans to have its first big city — they declined to name it — up by the end of the third quarter and to cover 70% of the country by the summer of 2023. “We won’t be walking in the first city, we’ll be crawling,” said Ergen, acknowledging there will be bumps the rollout.
On the video side, Ergen said Sling remains positioned but the virtual MVPD “should have gotten more market share” as cord-cutting continued last quarter. “We stumbled a little bit with the quality of the user experience… it was was the best and the first, but we maybe got a little complacent.” He noted said upgrades are underway in the first half of the year. Dish launched Sling in 2012.