Dish Network reported third-quarter earnings that missed consensus estimates as it swung to a loss. News that the company's chief executive will step down also sent Dish stock down, continuing its slide in 2023.
Dish has a pending merger with satellite communications firm EchoStar. Both companies are controlled by satellite TV services pioneer Charles Ergen.
For the quarter ending Sept. 30, Dish reported a loss of 26 cents per share vs. a 65-cent profit a year earlier. Revenue fell nearly 10% to $3.7 billion.
Analysts polled by FactSet predicted Q3 profit of 11 cents on revenue of $3.8 billion.
Pay-TV subscribers fell by 64,000, compared to an increase of 30,000 in the year-earlier quarter. Also, the company lost 225,000 net wireless subscribers, above estimates for a loss of 71,000.
Dish Stock: Bankruptcy In The Cards?
"The overwhelming probability here has always been that Dish would enter bankruptcy sometime in the next few years," Craig Moffett, analyst at MoffettNathanson, said in a report. "Today's results likely accelerate that."
He added: "Today's results leave Dish's adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) down 58% from a year ago and burning cash at a $2 billion annual rate. Their leverage is now above ten times EBITDA. Even on a pro forma basis for their EchoStar deal their leverage is over eight times."
On the stock market today, Dish stock collapsed 37.4% to close at 3.44. With the loss, Dish stock is down roughly 75% in 2023.
Dish also said that CEO Erik Carlson intends to resign effective Nov. 12. In addition, Dish said that it intends to work with EchoStar to appoint that company's president and CEO, Hamid Akhavan, to the combined company's top job.
Ergen spun out EchoStar from Dish in 2008.
The company has been building out of a 5G wireless network, with costs pressuring Dish stock. Meanwhile, Dish acquired Sprint's Boost-branded prepaid wireless business in 2020.
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