NEW YORK (AP) — Dish Network said Monday that its second-quarter profit slid 81 percent because of the legal costs associated with its defense against patent suits filed by TiVo and other rising expenses, but the nation’s second-largest satellite TV provider managed to add subscribers and maintain revenue.
The Englewood, Colo.-based company earned $63.4 million, or 14 cents a share, for the period ended June 30. That’s down from $335.9 million, or 73 cents a share, last year.
Analysts polled by Thomson Reuters, whose estimates typically exclude one-time items, forecast profit of 67 cents a share.
Revenue was nearly flat at $2.90 billion, with prior-year revenue coming in at $2.91 billion. Analysts expected revenue would not stray far from year-ago results, predicting $2.91 billion for the current quarter.
Total costs and expenses rose to $2.64 billion, which included a TiVo litigation expense of $196.4 million. In a worst-case scenario, Dish’s court battle with TiVo could force Dish to yank its digital video recorders over patent claims.
Subscriber acquisition costs increased to $388.3 million from $371.4 million, while general and administrative expenses grew to $143.5 million from $122.3 million.
Dish, widely viewed as one of the weaker players in the pay-TV industry, says it added about 26,000 net subscribers — its first quarterly increase in five quarters. The pay-TV industry includes cable, satellite TV and phone companies that provide TV services.
Dish, which concentrates on being a low-cost provider, said its subscriber growth was helped by the digital transition on June 12, the completion of its security access device replacement program and new sales and marketing efforts.
The company said its low-cost provider approach has been weakened by competitors’ aggressive promotional pricing to draw new subscribers as well as other promotions used to keep existing subscribers. Signal theft and other types of fraud have also hurt its position, but Dish said its security access device replacement program was meant to resecure its system.
Average monthly subscriber churn rate, or the rate at which it lost customers, fell to 1.73 percent from 1.87 percent.
