Lower churn helps Dish ride out Maria losses

(Reuters) - Dish Network Corp gained subscribers in the mainland United States in the third quarter and reduced the rate at which it lost existing customers, offsetting a hit to offshore business from Hurricane Maria.

The U.S. satellite and internet TV provider said it wrote off monthly fees from around 145,000 subscribers in Puerto Rico and the U.S. Virgin Islands cut off by damage to infrastructure from the storm.

The lost subscriptions, which the company said should return as the islands get back on their feet, reduced third-quarter profit at the U.S. satellite TV service provider to 57 cents per share, below analysts’ estimates of 59 cents.

The satellite TV service provider also said it will bear the costs of re-connecting customers hit by the storms.

“Given the devastation and loss of power, substantially all customers in those areas were unable to receive DISH service as of September 30,” the company said.

After an initial dip, however, Dish shares rose almost 4 percent in premarket trading in New York, reflecting gains in the other 50 U.S. states and a handful of other positive signs from the results.

While the hurricane effects meant that overall pay-TV subscribers declined about 129,000 in the quarter, the company said it added 16,000 net pay-TV subscribers in other markets.

Its “churn” rate, or the percentage of subscribers who leave a service provider, fell to 1.57 pct, compared to 2.11 pct last year.

Dish, like other pay-TV providers, is battling a broader trend of cord-cutting, where consumers drop their TV packages for online streaming services such as Netflix Inc and Amazon.Com Inc’s Amazon Prime.

To counter the threat, Dish in 2015 launched internet-based television service Sling TV for which it has said it is seeing demand beyond just younger consumers.

The company also faces intense competition in the traditional pay-TV market from players like AT&T Inc, Comcast Corp and Charter Communications Incand has been buying up wireless airwaves, or spectrum, in recent years as its satellite business came under pressure.

Net income attributable to Dish fell to $297 million, or 57 cents per share, in the three months ended Sept. 30 from $318 million, or 67 cents per share, a year earlier.

Analysts on average had expected earnings of 59 cents per share, according to Thomson Reuters I/B/E/S.

Revenue fell to $3.58 billion from $3.77 billion.