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Dish Network sets special dividend

dish stockWhile last week DirecTV posted their third quarter earnings loss, today DISH Network’s third quarter results were released.  And it wasn’t good for the satellite company.  Their net income fell a whopping 12% due to higher costs.  While this is a significant drop off, DISH Network  increased its subscription by 241,000 users.  It is the second consecutive increase in six quarters.  DISH’s media and public relations people stepped up the promotional advertising in order to attract and retain subscribers, and in the long run it looks like it worked.  But even though they got that many customers, the fact that their income fell by 12% does not bode well.  The cost of advertising and promotions certainly took their price.

What makes the story intriguing is that investors of DISH were surprised when they declared a one-time dividend of $2 per share.  This cash would be payable on Dec. 2 to shareholders of record as of Nov. 20.  Shares of DISH rose by $1, or 5.2 percent, to $20.15 in Monday morning trading.  Still suffering the collateral damage from the recession, DISH did this to appease investors.  The gesture rewards the investors for their faith in the company and that things are starting to turn around even though they fell short of the project earnings.  DISH missed the 44 cents per share projection woefully by 24 cents.

DISH also had to pay up to the lawyers in the ongoing battle between them and TiVo’s patented time-warp technology.  Because DISH does not want to pay royalties for the technology, they will have to pay for it in other ways, mainly in court.  Even though DISH reported a shortfall in profits, they are doing a good job, taking the right steps to attract more people.  Because they keep attracting subscribers, their operating costs will go down slightly.  They still have a leg up on DirecTV as it relates to service.

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