DISH Network Corp. (DISH - Analyst Report) declared strong financial results for the third quarter of 2013. Both the top line and the bottom line outpaced the respective Zacks Consensus Estimate. Just a week ago, the company’s competitor DIRECTV (DTV - Analyst Report) also reported robust third-quarter 2013 financial results.
At the end of the third quarter of 2013, DISH Network had approximately 14.049 million pay-TV subscribers, up 0.05% year over year. The company gained net 35,000 pay-TV subscribers in the reported quarter. Further, the company added net 75,000 broadband subscribers in the same quarter. At the end of the third quarter of 2013, DISH Network had 385,000 broadband subscribers.
Quarterly GAAP net income was $314.9 million or 68 cents per share compared with a net loss of $158.5 million or a loss of 35 cents per share in the year-ago quarter. Third-quarter 2013 earnings per share of 68 cents were significantly above the Zacks Consensus Estimate of 42 cents. Quarterly total revenue was approximately $3,601.6 million, up 2.2% year over year surpassing the Zacks Consensus Estimate of $3,591 million.
Segment wise, quarterly Subscriber related revenues were $3,466.6 million, up 6.1% year over year. Equipment and merchandise sales & other revenues were $118.9 million, down 52.8% from the year-ago quarter. Equipment sales, services and other revenues from EchoStar were $16.1 million, up 295.6% year over year.
Average monthly subscriber churn rate for the pay-TV in the third quarter of 2013 was 1.66% compared with 1.80% in the prior-year quarter. Average revenue per user was $81.05 against $76.99 in the year-ago quarter. Average subscriber acquisition cost in the third quarter of 2013 was $842 compared with $797 in the year-ago quarter.
In the reported quarter, Subscriber-related expenses rose 9.3% year over year to $1,976.7 million. Total Subscriber acquisition cost increased 9% year over year to $496.3 million. Depreciation and amortization expenses were $260.6 million, up 10.7% from the prior-year quarter.
General and administrative expenses were down 25.1% year over year to $247.5 million. Third-quarter 2013 operating profit was $397.4 million compared with an operating loss of $273 million in the prior-year quarter. Accordingly, quarterly EBITDA was $767.7 million as against a mere $37.1 million in the year-ago quarter.
In the first nine months of 2013, DISH Network generated $1,632.3 million of cash from operations compared with $2,034 million in the prior-year period. Free cash flow (cash flow from operations less capital expenditures) at the end of the reported period was $719.4 million compared with $1,352.1 million in the year-ago period.
At the end of the third quarter of 2013, DISH Network had $10,444.2 million of cash and marketable securities and $13,624.3 million of outstanding debt on its balance sheet as compared with $7,237.7 million of cash and marketable securities and $11,350.4 million of outstanding debt on its balance sheet at the end of 2012.
Other Stocks to Consider
DISH Network currently has a Zacks Rank #2 (Buy). Other stocks in the same industry which are performing well include Comcast Corp. (CMCSA - Analyst Report) and TiVo Inc. (TIVO - Analyst Report). Both of these carry a Zacks Rank #2 (Buy).