Dish Network Corp Q1 2009 - top estimate

By Kelly Riddell May 11 (Bloomberg) -- Dish Network Corp., the nation’s second-largest satellite-television provider, rose the most in almost seven months after first-quarter profit exceeded analysts’ estimates, helped by price increases. Dish said today that earnings climbed to 70 cents a share, topping the 56-cent average of estimates compiled by Bloomberg. Sales advanced 2.1 percent to $2.91 billion, in line with the average analyst estimate. The average monthly bill rose 3.1 percent as Chief Executive Officer Charlie Ergen charged more for programming and equipment like digital video recorders. That helped Dish make up for subscriber losses, which reached 94,000 last quarter . The company is vying for subscribers with DirecTV Group Inc. amid an economic slump and heightened competition from cable operators. “While the subscriber results were bad, they could have been worse,” said Craig Moffett, an analyst with Sanford C. Bernstein. “We should never underestimate the U.S. consumer’s healthy appetite for pay-TV.” He predicted 78,000 customer losses and ranks the stock as a “market perform.” The U.S. switch to digital television also may have helped curb customer defections, Moffett said. Broadcasters are switching to digital signals as of June 12, forcing people with analog TVs to get converter boxes or switch to cable or satellite services. Dish rose $1.80, or 12 percent, to $17.11 at 9:36 a.m. New York time in Nasdaq Stock Market trading. Earlier the stock climbed as much as 16 percent, the most since Oct. 17. Earnings rose to $312.7 million, or 70 cents a share, from $258.6 million, or 57 cents, a year earlier, the company said in a statement today. Subscriber acquisition costs declined 22 percent, helping Ergen to wring more out of profit. Customer Turnover Dish’s customer turnover rate increased to 1.83 percent last quarter from 1.68 percent a year ago. Dish is focusing on operations, guarding against piracy and generating higher free- cash, instead of investing in advertising and promotions to retain customers. Comcast, the largest U.S. cable operator, Time Warner Cable Inc., and Cablevision Systems Corp. all added video customers in the quarter. AT&T Inc. and Verizon Communications Inc., the two largest phone companies, also posted TV subscriber gains in the period.