Net subscriber additions to EchoStar’s Dish Network in the third quarter were lower than expected at 110,000 a 62.7% drop compared to 295,000 in the same quarter a year ago.
In EchoStar’s third quarter earnings report released this morning, the company said that increased competition and adverse economic conditions resulted in the lower net additions. Gross additions were lower, dropping 5.6% from Q3 2006 to 904,000 in the quarter while Dish’s monthly churn rate ticked up to 1.95% from 1.76% a year ago.
These numbers provide more insight into the competitive dynamic in the pay-TV industry, according to Sanford Bernstein analysts Craig Moffett. “The results are wholly inconsistent with the view that share is shifting from cable to satellite,” Moffett wrote in a research note this morning. “Instead, these results point to a shift in industry growth rate, likely as a consequence of macro-economic slowing.”
In the quarter, EchoStar reported revenue of $2.79 billion, or a 13% increase from $2.48 billion in the same quarter a year ago while net income increased 43% to $200 million. Earnings per share were $0.45 versus $0.31 a year ago.
Dish’s average revenue per unit rose 4.3% in the quarter to $66.01 while the acquisition cost per subscriber dropped 6.1% to $646.
EchoStar’s stock fell over 17%, or close to $9, out of the gates this morning, hitting a low of $40.03.