DISH Network Corp. (DISH - Analyst Report) declared mixed financial numbers for the fourth quarter of 2014, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed.
Quarterly net income came in at $409.9 million or 88 cents per share compared with net income of $288 million or 64 cents in the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of 43 cents.
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Quarterly total revenue stood at approximately $3,681.7 million, up 4% year over year but below the Zacks Consensus Estimate of $3,704 million.
Segment-wise, Subscriber-related revenues grossed $14,495.1 million in 2014, up 5.3% from the figure recorded in 2013. In 2014, Equipment and merchandise sales & other revenues totaled $85.8 million, down 9.5% from 2013. Equipment sales, services and other revenues from EchoStar added up to $62.5 million in 2014, up 38.1% from the 2013 figure.
At the end of the fourth quarter of 2014, DISH Network had approximately 13.978 million pay-TV subscribers against 14.057 million at the end of 2013. Further, the company added 141,000 broadband subscribers in 2014 against 253,000 in 2013. Meanwhile, at the end of fiscal 2014, DISH Network had 577,000 broadband subscribers in comparison with 436,000 at end-2013.
Average monthly subscriber churn pay-TV rate in the fourth quarter stood at 1.59% compared with 1.58% in the prior-year quarter. Average revenue per user was $83.77 against $80.37 in the year-ago quarter. Average subscriber acquisition cost in 2014 was $853 versus $866 in 2013.
In 2014, Subscriber-related expenses crept up 6.3% year over year to $8,313.1 million. In 2014, depreciation and amortization expenses totaled $1,077.9 million, highlighting an increase of 2.3% from 2013. General and administrative expenses were up 5% in the year to $815.7 million.
Fourth-quarter 2014 operating profit was $534.9 million compared with $388.5 million in the third quarter of 2014. Operating profit at the end of 2014 stood at 1,824.5 million in comparison to 1,348.2 million at end-2013. Adjusted EBITDA in 2014 stood at $2,848.8 million versus $2,804.8 million at the end of 2013.
For the twelve month-period ended Dec 31, 2014, DISH Network generated $2,408.1 million in cash from continuing operations compared with $2,309.2 million in 2013.
At the end of the fourth quarter, DISH Network had $7,104.5 million of cash and cash equivalents and $13,782.3 million of outstanding debt on its balance sheet compared with $4,700 million and $12,596.8 million, respectively, at the end of 2013.
Our Take
DISH Network is steadily transforming itself from a low-priced leader in the U.S. pay-TV industry to a premium service provider in order to check subscriber churn. Moreover, the company’s plan to deploy triple-play services coupled with the increased rollout of its popular hopper devices will help it to drive subscriber growth and counter competition from Netflix, Inc. (NFLX - Analyst Report), AT&T Inc.’s (T - Analyst Report) U-Verse and Verizon Communication Inc’.s (VZ - Analyst Report) FiOS pay-TV services going ahead.
Currently, DISH Network carries a Zacks Rank #3 (Hold).
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