By Drew FitzGerald
Dish Network Corp. posted a surprise customer gain in the third quarter as its internet-TV business overshadowed accounts lost on the satellite side.
Overall, the company posted a net gain of 148,000 pay-TV customers during the three months that ended Sept. 30, its first such increase since 2017. That included a loss of 66,000 satellite-TV customers while internet-based Sling TV added 214,000 customers. Dish ended the period with 12.2 million pay-TV subscribers.
Financial analysts expected the company to post a loss of 162,000 subscribers, according to an average of estimates compiled by FactSet.
Dish's earnings have come under pressure in recent years as satellite-TV customers drop their channel bundles in search of cheaper alternatives. Some have stopped paying for live TV altogether.
Rival channel bundlers have suffered more defections, however. AT&T Inc. reported a loss of 1.4 million pay-TV customers over the same third-quarter period, a figure that included customer declines in its online TV service.
AT&T recently increased prices for its AT&T TV Now streaming video service, while Sony Corp. said it would scrap its PlayStation Vue streaming service. Dish has also raised Sling TV prices, though its basic packages still attract cost-conscious customers with plans as low as $25 a month.
Dish's earnings fell as it traded satellite subscribers for gains at Sling TV. Its average revenue per user slipped to $85.29 during the quarter from $86.29 a year earlier.
Dish reported a third-quarter profit of $353.3 million, or 66 cents a share, down from $431.7 million, or 82 cents a share, a year earlier. Revenue fell 6.7% to $3.17 billion.
Growth at Dish was under pressure last year as the company fought with Univision over carriage rates. The two sides struck a deal in March to restore the Spanish-language channels.
The company resolved a standoff with Fox Corp. earlier this year that threatened the airing of National Football League games. It continued to negotiate with Fox over carriage of its regional sports networks. Fox Corp. and Wall Street Journal parent News Corp share common ownership.
Other disputes have lasted longer. AT&T-owned HBO has been unavailable through Dish or Sling for more than a year.
Dish executives said Thursday that cord-cutting helped boost growth at Sling, which highlights the value of its "skinny" channel bundles. Chief Executive Erik Carlson said he couldn't remember a recent quarter in which the company hadn't entered a programming spat with a channel owner as the company focuses on managing its costs.
"We make hard decisions," Mr. Carlson said in a call with analysts. "These are decisions that we've made to try to grow our customer relationships in a profitable manner."
Mr. Ergen has focused much of the past few months on Dish's planned wireless business. The still-unbuilt wireless network could be bolstered by assets divested by Sprint Corp. if the cellphone carrier is able to close its planned merger with rival T-Mobile US Inc.
Dish said Thursday that it would raise about $1 billion through newly issued shares to help pay for the new wireless venture, among other uses. The company said Mr. Ergen, who owns about 52% of the company, will fully exercise his rights to participate in the stock offering.
Dish shares rose 3.5% to $34.69 Thursday. They have climbed nearly 40% so far this year.
Write to Drew FitzGerald at firstname.lastname@example.org