Losses at Blockbuster, and costs from acquisition of wireless spectrum, contributed to the dreariness of Dish Network's Q2 report. The company had net income of $226M, -32.6% vs the same period last year, on revenues of $3.6B, -5.6%. The revenue figure was just slightly short of analysts' forecasts. But earnings at 50 cents a share were far worse than the 68 cents the Street expected. Dish had already announced that it lost about 10,000 subscribers in Q2, ending with 14.1M ' which was better than many analysts anticipated. This morning's report shows, though, that Blockbuster ' which Dish bought in April 2011 ' is still struggling. The unit's revenues of $253M were slightly down from last year, but this time it had an operating loss of $13M vs a $10M profit. Dish says that it has closed about 650 domestic stores this year ' including 150 in Q2 ' leaving it with about 900. In addition, Dish had to account for its recent purchases of wireless spectrum which it intends to use to create a national streaming service, yet to be clearly defined. The spectrum generated just $1M in revenue, but $18M in expenses for Q2.
Dish had little to add about its various battles: The dispute with AMC Networks ' which led Dish to drop the company's channels on June 30, the last day of the quarter ' had 'an immaterial impact' on subscriptions, the company says. It adds, though, that it 'cannot predict with any certainty' what it might do to future results. It also wouldn't predict possible losses from AMC's $2.5B breach of contract suit over Dish's decision to drop the Voom suite of high definition channels. Dish was equally vague about the possible impact of its courtroom scrap with broadcasters who say the company's Hopper DVR infringes on their copyrights when it automatically skips past ads in recorded shows. CEO Joseph Clayton says that 'in the face of a difficult economy and stiff competition, a disciplined approach to subscriber acquisition is paying off' with a lower churn rate.
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