AP News

Dish shares rise on upbeat subscriber trends


LOS ANGELES (AP) — Shares of satellite TV company Dish Network Corp. rose Tuesday after an analyst said sales agents are reporting better subscriber additions than a year ago and that more new customers are opting for the higher-priced Hopper digital video recorder.

THE SPARK: Credit Suisse analyst Stefan Anninger said in a research note that independent Dish dealers are reporting more new customers in the third quarter compared with a year ago. He said the dealers also said a higher percentage of new customers are adding the Hopper compared to the second quarter.

The Hopper DVR, which comes with ad-skipping technology, costs about $4 more per month than other Dish DVRs.

Anninger also said he expects Dish to raise prices on its core programming packages by $5 per month next year, which should result in average revenue per user rising 3.4 percent in 2013.

THE BIG PICTURE: Dish is the nation's third-largest provider of TV signals behind Comcast Corp. and DirecTV with about 14 million subscribers. It makes money by charging consumers more for TV programming than it pays to the media companies that make it. Disputes over the cost of such programming have led to blackouts. Dish dropped AMC's four channels in June in a dispute over fees.

Dish is also embroiled in two major legal battles.

One is with AMC Networks Inc. over AMC's Voom suite of channels. Dish dropped the channels but AMC says Dish violated a long-term agreement to carry them and is suing for $2.5 billion. A trial is set to start Sept. 19.

The other dispute is with broadcasters CBS, NBC and Fox over the Hopper. The broadcasters say the DVR breaks licensing agreements with Dish but Dish argues its technology is no different from standard DVRs which consumers can also use to skip commercials.

THE ANALYSIS: Anninger raised his price target on Dish shares to $38 from $34 given the positive subscriber trends. He also said Dish could benefit from the sale of unused spectrum at a price of $7 billion to $8 billion. Excluding the spectrum, shares were trading at just 3.7 times his estimate for earnings before interest, taxes, depreciation and amortization in 2013, but should be worth about 4.4 times that given the subscriber trends, he said.

SHARE ACTION: Dish shares were up 82 cents, or 2.5 percent, at $33.08 in midday trading Tuesday. That's not far from the 52-week high of $35.64 reached in late March.


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