DISH Network Reports Third Quarter 2010 Financial Results

[TheForce]

There are only two groups of people who care about the subscriber count, up or down by a measily 29,000. Those who work in subscriptions at Dish Network and DirecTV and the zealots who hate dish Network who hang around these threads in the forums.

Several posts here are worried for investors in Dish stock. As an investor in Dish Network, I am only concerned about profits! I also recognize that the first subscribers to jump ship are those who are likely low profitable customers and not good revenue sources for the long haul. Many, like brother bob had Dish for a short while and then churned again. The moment D* ticks his button, Bob will again churn to something else. As a businessman I view his kind of account a liability until the second or third year. The real losses I see are those loyal customers, ( like me) who have reduced their account services to save a buck. I suspect these are much higher figures and unknown to us. So, I could be wrong, especially in light of the profitability which is the more important number to investors as that is a direct measurement of the management quality. When Bob or others call Dish and Charlie a bunch of bafoons, I see it as how they view how much they can get for free or have to pay. I'll call Charlie a bafoon when they report serious losses quarter after quarter. Until then, in my book, Charlie and company are great!

Normally a stock will soar up in anticipation of a good qtr report and then fall after the report. Dish continued to go up as the future is perceived as good for investors.

Personally, Dish was a disappointing year for me as an investor as the stock lollygaged around the $20 mark all year. DirecTV was a much better year as DTV went up almost 90%. There are all sorts of reasons for this that have more to do with stock price manipulation than actual product offerings such as the notion that DTV is moving back to private ownership which will increase the price of the stock with more buyers than sellers. But Dish did bring us a $2 per share one time dividend last December. A year ago the outlook for Dish Stock was $32 a share. This year it is only $24. Of more importance to me as an investor is the impact IPTV will have on MSO's in general. As these new services such as Netflix and Hulu+ come on board in 2011, we could see a significant negative impact in the stock of both D* and E*. If sat companies aren't careful they could be seeing the general business model decline we have with broadcast tv stations.

 

[MikeD-C05]

I don't know why folks are surprised that DISH profits are up and subs are down. AFter all they raised additional receiver fees substantially this last February. So those who had multiple dual tuner dvrs got an extra $10.00 tacked on for their trouble for each one. This of course made some subs switch to other providers because they felt that this was too greedy and they weren't putting up with it. Then add the new sling fee and the new google integration fee ,each at $4.00 monthly, and you see existing profits go up again. Of course there is also the price hikes they had in February and again in June. A first time for two price hikes in a year by DISH. They go hand in hand. Price hike and new fees = loss of subs who churn over the extra cost. And lets not forget the never ending programming price disputes that lead to dropped channels both in hd and or in sd. This too leads to churn. I am betting that 4th quarter financial results will lead to more churn and more profits.

But eventually there is a line of diminishing returns that DISH will cross and even then their profits will drop along with the subs. Add the Neflix and Hula phenomenon that is causing some to cut the cord , and you can see the potential for more churn goes up even more. DISH is going to have to look at cutting some of these FEES that they create , in order to generate an interest in their service. Especially since the competition is still only charging an even $5.00 per extra receiver. It is one thing to advertise that you are the low cost programming leader ,and then tack on the extra fees back on the back end to make your bill higher than both Directv and Cable competition.

DISH needs multi - room viewing -networking like Directv has to be able to compete on this technology. But as long as their additional receiver fees stay up in the stratosphere , this is a non starter. I think DISH needs both profits and more subs to be a profitable company in the long term. Short term profits are just that -short. If a company doesn't look long range and try to make a sturdy base structure for itself it will eventually grow smaller and lose any potential for growth. Do the right thing DISH and revamp your additional receiver fee structure unless you want the company continue to shrink in its size.

 

[Bob Haller]

There are only two groups of people who care about the subscriber count, up or down by a measily 29,000. Those who work in subscriptions at Dish Network and DirecTV and the zealots who hate dish Network who hang around these threads in the forums.

Several posts here are worried for investors in Dish stock. As an investor in Dish Network, I am only concerned about profits! I also recognize that the first subscribers to jump ship are those who are likely low profitable customers and not good revenue sources for the long haul. Many, like brother bob had Dish for a short while and then churned again. The moment D* ticks his button, Bob will again churn to something else. As a businessman I view his kind of account a liability until the second or third year. The real losses I see are those loyal customers, ( like me) who have reduced their account services to save a buck. I suspect these are much higher figures and unknown to us. So, I could be wrong, especially in light of the profitability which is the more important number to investors as that is a direct measurement of the management quality. When Bob or others call Dish and Charlie a bunch of bafoons, I see it as how they view how much they can get for free or have to pay. I'll call Charlie a bafoon when they report serious losses quarter after quarter. Until then, in my book, Charlie and company are great!

Normally a stock will soar up in anticipation of a good qtr report and then fall after the report. Dish continued to go up as the future is perceived as good for investors.

Personally, Dish was a disappointing year for me as an investor as the stock lollygaged around the $20 mark all year. DirecTV was a much better year as DTV went up almost 90%. There are all sorts of reasons for this that have more to do with stock price manipulation than actual product offerings such as the notion that DTV is moving back to private ownership which will increase the price of the stock with more buyers than sellers. But Dish did bring us a $2 per share one time dividend last December. A year ago the outlook for Dish Stock was $32 a share. This year it is only $24. Of more importance to me as an investor is the impact IPTV will have on MSO's in general. As these new services such as Netflix and Hulu+ come on board in 2011, we could see a significant negative impact in the stock of both D* and E*. If sat companies aren't careful they could be seeing the general business model decline we have with broadcast tv stations.

I had E for around 13 years......... and was paying about 125 bucks a month for AEP fees etc before the crushing price increase

The fixed costs of satellite TV, the sats uplink centers etc are the bulk of the overhead.

its best top spread these costs over bas many subs as possible.

lastly how many companies are happy to shrink? stock value is headed down

Now their are rumors E will show a 6 tuner box at CES. How many years do you think it will take E to get in general use, with most of the features working and more important STABLE?

Its altogether likely the box will be obsolete by then.........

 

[TheForce]

stock value is headed down

Do you even know what you are talking about? Stock value is based on P/E and not just price. When price remains the same and earnings increase the P/E dictates an increase in value not a decrease. I don't think you are a math dimwit, just that you don't know anything at all about business and stock so you should refrain from commenting and do a little bit of learning.

PS- I was referring to goaliebob churning, not you Haller. I think he had Dish for about a year before going back.

 

[Slamminc11]

Do you even know what you are talking about?...

My vote is absolutely not!

 

[Bob Haller]

Do you even know what you are talking about? Stock value is based on P/E and not just price. When price remains the same and earnings increase the P/E dictates an increase in value not a decrease. I don't think you are a math dimwit, just that you don't know anything at all about business and stock so you should refrain from commenting and do a little bit of learning.

PS- I was referring to goaliebob churning, not you Haller. I think he had Dish for about a year before going back.

gee this updumps the theory of lowering churn.....

now suddeny churn and lost subs are great, because it increases profits.

hey the new theory of business, dont advertise, tick off your customers and shrink your business

Meanwhile in the same economy D is growing nicely.......

Hey charlie should never celebrate more subs, they are costly and hurt profits.........

 

[Hall]

I think that the majority of Dish's customers have one or two receivers, so the increase in those fees wasn't horrible to them. Coming here and reading, you'd think that there's a huge bunch with many receivers scattered throughout the house, but I suspect that really isn't the case. I know that of the friends I have with Sat service, almost all of them only have 2 receivers.

Huh ? You mean that not all of Dish's customers have 3, 4, or 5 receivers, DVRs too, all hooked up to HDTVs ? You're right though, people here are typically NOT "normal" Dish subscribers.

We have ... *GASP* ... one receiver. Yeah, it's a 722k... Until recently, we only had (1) HDTV. The TV in our bedroom was just replaced a few months ago with an HDTV.

 

[lparsons21]

Huh ? You mean that not all of Dish's customers have 3, 4, or 5 receivers, DVRs too, all hooked up to HDTVs ? You're right though, people here are typically NOT "normal" Dish subscribers.

We have ... *GASP* ... one receiver. Yeah, it's a 722k... Until recently, we only had (1) HDTV. The TV in our bedroom was just replaced a few months ago with an HDTV.

Unit my adult son moved back home (grumble...), I only had the 722k. Now I've got the 612 for him and he pays the equipment fee. IF he ever moves out I guess I'll move it into my bedroom along with a TV or some such. I don't actually need one there, when I go to bed I read about 2 pages of whatever book I have at the time and then I'm gone...

 

[Bob Haller]

this from sky reports newsletter.

Hard times are back at DISH Network as the DBS operator reported customer losses of -29K on what Bernstein Research analyst Craig Moffett called "a severe deterioration in churn (again)." Revenue growth was down as was steady state cash flow to, Moffett notes, "a heart-stopping -35.5%"

sure stock will do great on such reports.

the article also reprted aquisition costs are now about a grand because of giving away programming.

just what was churn anyway? my computer spazzes when i try to look at the details

 

[TheForce]

now suddeny churn and lost subs are great, because it increases profits.

Can be! It's not a new theory but an old practice for people who understand business.

Business success is not always increase sales and you will automatically increase profits. That is a myth that ruins many people who try to grab sales without regard to the quality of your customer. With Dish, it is loss leaders where a churned customer, one you grabbed from a competitor because of lower introductory rates are not profitable until they reach term. That term is not generally known to the public but rest assured, Dish knows what it is. There is a finite cost in acquiring a new customer and it is a gamble until the customer remains for the term and becomes profitable. In another way it is said that many poorly run businesses, 90% of the cost of operations is for 10% of your customers. Want to raise profits? Get rid of that 10%.

You make the foolish assumption that your attitude is the same for all Dish's customers. Trust me, you are the exception, not the rule. While nobody likes rate increases, most reasonable people understand that when benefits of a service increase ( as in better hardware, additional programming like HD channel numbers and more reliable signal ) the cost will increase in addition to what inflation dictates. If the cost becomes too high the customer is free to shop the competition. The only people who hang around after jumping ship are those like you who subconsciously regret their present new position with the competition. Bob, trust me when I move on to a new service, I don't hang around the old camp and bellyache all day long about how bad it was. I spend my time hanging around those with the new service to see how I may better benefit from my decision. By your constant complaining about Dish around here, all you are doing is sending a message that you are just an unhappy person. I feel bad for you so my advice is when you decide to jump ship, swim to another ship and enjoy sailing.

 

[Bob Haller]

Can be! It's not a new theory but an old practice for people who understand business.

Business success is not always increase sales and you will automatically increase profits. That is a myth that ruins many people who try to grab sales without regard to the quality of your customer. With Dish, it is loss leaders where a churned customer, one you grabbed from a competitor because of lower introductory rates are not profitable until they reach term. That term is not generally known to the public but rest assured, Dish knows what it is. There is a finite cost in acquiring a new customer and it is a gamble until the customer remains for the term and becomes profitable. In another way it is said that many poorly run businesses, 90% of the cost of operations is for 10% of your customers. Want to raise profits? Get rid of that 10%.

You make the foolish assumption that your attitude is the same for all Dish's customers. Trust me, you are the exception, not the rule. While nobody likes rate increases, most reasonable people understand that when benefits of a service increase ( as in better hardware, additional programming like HD channel numbers and more reliable signal ) the cost will increase in addition to what inflation dictates. If the cost becomes too high the customer is free to shop the competition. The only people who hang around after jumping ship are those like you who subconsciously regret their present new position with the competition. Bob, trust me when I move on to a new service, I don't hang around the old camp and bellyache all day long about how bad it was. I spend my time hanging around those with the new service to see how I may better benefit from my decision. By your constant complaining about Dish around here, all you are doing is sending a message that you are just an unhappy person. I feel bad for you so my advice is when you decide to jump ship, swim to another ship and enjoy sailing.

and you have dish stock and would prefer i be silent.

Meanwhile I am still interested in the industry.

and to shrink for more profit, theres a point of dimishing return when you have a fleet of satellites, and uplink centers. the marginal cost to support extra subs is low in comparison.

so now what is that churn number, then take it times a grand each.....

now thats big bucks

 

[TheForce]

No Echostar is a seperate company. I have not seen their numbers yet.

I don't own any stock in SATS but looked up the report in my trader's news-

6:05a ET November 5, 2010 (Market Wire)

EchoStar Corporation (NASDAQ: SATS) today reported total revenue of $607 million for the quarter ended September 30, 2010, a 25.7 percent increase compared with $483 million for the corresponding period in 2009.

EchoStar reported net income attributable to EchoStar common shareholders of $5 million for the quarter ended September 30, 2010, compared with net income of $294 million during the corresponding period in 2009. Basic earnings per share was $0.06 for the quarter ended September 30, 2010, compared with basic earnings per share of $3.45 during the corresponding period in 2009.

Detailed financial data and other information are available in EchoStar's Form 10-Q for the quarterly period ended September 30, 2010, filed today with the Securities and Exchange Commission.

EchoStar will host its Third Quarter 2010 financial results conference call today at 1 p.m. EDT. The dial-in number is (877) 500-5931.

 

[Hall]

With Dish, it is loss leaders where a churned customer, one you grabbed from a competitor because of lower introductory rates are not profitable until they reach term. That term is not generally known to the public but rest assured, Dish knows what it is.

What ? Your trying to say that Dish knows how to run a business ? A profitable one at that ?

 

[Bob Haller]

Goaliebob- Here is a link I found for the earnings call transcript[/QUOTE]

thats the 2nd q transcript

 

[Bob Haller]

if aquistion is really a grand, and Es gross profit margin say 40% you could back out the number using the normal top 120 or so......

in any case with such a high aquisition cost E should try to minimize churn at all costs.

Like DONT try raping your best subs with multiple receivers........ cause eventually it will impact your bottom line.

Don L how long do you want E to shrink? at what point do you believe your stock will tank?

6 or 8 quarters? 4 years of shrinkage?

wheres your profitable sweet spot?

5 million subs

 

[Scott Greczkowski]

Goaliebob- Here is a link I found for the earnings call transcript

Thats the 2nd quarter onee, here is the 3rd quarter transcript.

Dish Network Q3 2010 Earnings Call Transcript -- Seeking Alpha

 

[TheForce]

Saw that. Sorry. Deleted my incorrect reference. Thanks Scott for the correct one.

 

[goaliebob99]

Do you even know what you are talking about? Stock value is based on P/E and not just price. When price remains the same and earnings increase the P/E dictates an increase in value not a decrease. I don't think you are a math dimwit, just that you don't know anything at all about business and stock so you should refrain from commenting and do a little bit of learning.

PS- I was referring to goaliebob churning, not you Haller. I think he had Dish for about a year before going back.

Brother Don, I had dish for about 4 years, before I churned to Directv, then I was with Directv for about 9 months, Then went back to dish for a year (more recently), I'm not going to be churning any time soon from directv as directv sutes my needs way more than dish can. I would have stayed with dish, if dish had kept me happy and made others happy by lauching HDRSN's in full time. It amazes me that HD is the new standard in braudcast yet Dish cant even provide the very basic programming in HD, especally when its avaliable to the masses from the providers. The other thing that has me shaking my head is that dish is the only provider out there who doesnt braudcast these and their prices are in par with other providers.

With that said yes directv needs improvment on the national HD level of programming. I'm willing to over loook that given DECA, MRV, Two very nice HR24's, HDRSN's in full time, and Full time 3D programming. I have to honestly say, that I'm really happy with directv. Any national HD that I'm missing out on, I get with comcast anyhow, so its no real loss. I just have to learn to live and pay two providers in order to get the programming that I want. I would wrather pay one and be done with it, but by the time the two satellite companies figure it out to pull their head out of there ass, Comcast will most likely have it all by then with switched digital.

Time will tell, but it isnt looking good for sat if comcast keeps their upgrade machine going. Directv's Upgrade messages from beyonce must have hit comcast hard as thats all they have been doing is upgrading their network. Honestly, its hurting satellite out here.

 

[TheForce]

Bob Haller-

Don L how long do you want E to shrink? at what point do you believe your stock will tank?

6 or 8 quarters? 4 years of shrinkage?

wheres your profitable sweet spot?

My trading strategy varies based on whether it is in my Roth IRA, Traditional IRA or a cash income based account. Since Dish is not normally a dividend paying company, I Trade it based on buy sell differential. I do not short sell as it is too dangerous for my blood. But I hold an average amount of the shares and trade a % on a weekly basis. As a Trader, philosophically, I don't care about the number of subscribers, or the strategy of the company, just that the fundamentals are sound, which for Dish they are. Then I make my profits on buy sell differential and trade often. At the end of the year I feel good with making 20-50% on my money invested. Traditionally, Dish stock moves in a commission cost reduction cycle that I make a move about once every 3 weeks. Using this kind of strategy it soon becomes a game of money management than one needing to predict winners and losers as companies. Usually, the new money cost basis is fully returned in 3-4 months, after that I can't lose even if (as you say) the stock tanks. If I see a company 10Q that looks suspicious and in danger of tanking, like TIVO ( IMO ) I sell out and move on.
Probably not the answer you were looking for but then I don't treat buying a stock in any company the way I do buying their products. It's a totally different mindset.

 

[TheForce]

Brother Don, I had dish for about 4 years, before I churned to Directv, then I was with Directv for about 9 months, Then went back to dish for a year (more recently), I'm not going to be churning any time soon from directv as directv sutes my needs way more than dish can. I would have stayed with dish, if dish had kept me happy and made others happy by lauching HDRSN's in full time.

Yep you are not what I would call a profitable customer. But I don't know what the BE points are. I just know that me being a Dish customer once in 11 years is more profitable than your churn rate is. I always knew you were a sports fan and place that high on your priority list so I could never understand why you moved away from DirecTV when you did. For me, Dish won the technology race between D* and E*. They also resolved my complaint with Blackouts on our Jaguar team, which DirecTV wasn't able to do with NFLST that I paid for for one season and every damn game except two were blacked out. It was a very expensive subscription for me. I had D* from the beginning until summer of 2006.