, the second largest subscription based TV programming provider in the United States, posted a sharp rise in second-quarter profit Tuesday despite losing 135,000 net subscribers to satellite service rival DirecTV and streaming content providers such as Hulu and Netflix.
While revenues for the company jumped 13 percent to $3.59 billion, beating analyst’s projections, reported net income for Q2 was only $335 million (75 cents a share), a number that failed to meet expectations on Wall Street.
Following Dish Network’s second quarter earnings announcement, their stock dropped over 2.5 percent to $22.07.
As for the 135,000 subscriber loss, the company blamed increased competitor discounting, slowing growth in paid TV generally, and their decision to stop attempts of keeping subscribers on their least profitable packages if they seemed likely to drop Dish for a competitor.
“The best way I can describe this quarter’s results is murky,” Joe Clayton, president and CEO of DISH Network, said in a conference call with analysts. “This was a transitional quarter. It will take some time to regain our momentum.”
Clayton said the company planned to spend more to pick up subscribers in the third quarter — the fall season when TV viewership traditionally rises — when it makes more sense to win new customers.
In addition, he revealed that Dish Network was renegotiating contracts with movie studios to keep Blockbuster supplied and planned to invest in Blockbuster’s digital arm. He emphasized that the brand still had appeal, but poured cold water on the idea that the company would invest on the order of $1 billion to reinvigorate the company.
“I don’t have any concerns about spending $1 billion on Blockbuster, because I’m not,” he said.