DISH Network Corp. (DISH) declared fourth quarter 2009 financial results. Although the company’s fourth quarter earnings slipped 18% year-over-year on higher subscriber-related costs, they topped the Zacks Consensus Estimate.
The company reported earnings of $179 million or 40 cents per share, compared to $217 million or 48 cents in the year-ago quarter. Quarterly EPS of 40 cents was significantly above the Zacks Consensus Estimate of 33 cents.
Quarterly total revenue increased 1.4% to $2.96 billion, from $2.92 billion in the year-ago period. This was mainly due to an increase in subscriber related revenue. Quarterly total revenue was mostly in line with the Zacks Consensus Estimate.
DISH added 249,000 new subscribers during the quarter, which raised its total subscriber base to 14.1 million at the end of 2009. The growth in subscribers was driven by sales and marketing promotions as well as improved churn. The company’s churn rate reduced due to the recent completion of the security access device replacement program and an increased new subscriber commitment period.
However, growth in subscribers continued to be adversely affected by sluggish economic conditions, intense competition from rivals, fiber- and Internet-based pay TV operators and signal theft.
For full fiscal 2009, segment wise, Subscriber related revenue was $11.54 billion, up 0.7% year-over-year. Equipment sales & other revenue was $97.9 million, down 21.2% year-over-year. Equipment sale (EchoStar) revenue was declined 35.7% to $7.5 million, Transitional services and other (EchoStar) revenue was $20.1 million, down 21.9% year-over-year.
For full fiscal 2009, Subscriber-related expenses increased 6.4% year over year to $6.4 billion, caused by higher programming content costs and expenses related to call center operations. Subscriber acquisition costs rose marginally by 0.5% to $1.5 billion, primarily due to a rise in new subscribers, partially offset by a decline in advertising and hardware costs per activation.
General and administrative expenses grew 10.8% to $602.6 million on higher personnel costs and professional fees to support the network. Accordingly, operating income plunged 32.5% to $1.4 billion, while operating margin slipped to11.9%, from the year-ago level of 17.7%.
For full fiscal 2009, the company generated $2.2 billion of cash from operations, remains almost same year-over-year. Free cash flow (cash flow from operations less capital expenditures) in fiscal 2009 was $1.16 billion compared to $1.06 billion in fiscal 2008.
At the end of fiscal 2009, DISH Network had $2.31 billion of cash and marketable securities and $6.5 billion of outstanding debt on its balance sheet compared to $717.4 million of cash and marketable securities and $5 billion of outstanding debt on its balance sheet at the end of fiscal 2008.
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