Dish Network (NASDAQ:DISH) has tumbled 12.5% after its first-quarter earnings missed on nearly all measures, falling short on revenue and profit expectations and sporting disappointing subscriber numbers.
Revenues fell 3.8% to $4.33 billion, while costs rose (particularly in selling, general and administrative expense), leading operating income to slide 36%, to $550.4 million.
Net income slipped 31% to $432.7 million.
Subscriber losses in its pay TV division doubled year-over-year, falling by about 462,000 subscribers vs. a year-ago decline of 230,000 net subscribers. That brought total pay TV subscribers to 10.24 million (7.99 million on Dish TV, 2.25 million on Sling TV), vs. an expected 10.5 million.
The company also shed retail wireless net subs to the tune of 343,000, more than double the rate of last year's decline (of 161,000 net subs). It ended the quarter at 8.2 million wireless subs, vs. an expected 8.4 million.
Meanwhile, net cash flow from operating activities fell to $705.3 million from a year-ago $1.13 billion, and combined with heavier purchases of property and equipment, free cash flow turned negative: to -$190.95 million from a prior-year positive $728.7 million.
"Trends at the moment are not encouraging," MoffettNathanson says in reaction, zooming in on the cash flow turn in particular: That's "most discordant for a broader market suddenly focused on bird-in-the-hand cash generation stories." The firm is Neutral with a $28 price target.
Bullish New Street Research (Buy rating) acknowledged the revenue, EBITDA and cash flow disappointed, but looked on the bright side: "The transition of subs from the Sprint network seemed to go better than expected, and the company may be close to completing the network deployment required to meet the June 2022 deadline."
Dish Network just turned on its 5G service in Las Vegas this week, part of a move toward covering 20% of the U.S. population with the network by June.