dan9999
11-10-2009, 02:03 PM
DN CEO: Dividends Are 'Always On The Table For Us'
By Roger Cheng
DOW JONES NEWSWIRES
NOVEMBER 9, 2009, 1:05 P.M. ET
NEW YORK (Dow Jones)--DN Corp. Chief Executive Charles Ergen said Monday that dividends are "always on the table" for the satellite-TV provider.
The comments come on the heels of Dish's $2-per-share dividend payout, which took Wall Street by surprise because the company tends to avoid returning cash to shareholders.
Dish did attempt to use the cash to make an acquisition or reinvest in the business, but couldn't find a good use for the funds, Ergen told analysts Monday. He was reluctant to spend on the business with the overhang of TiVo Inc. (TIVO) litigation still lingering.
On TiVo, Ergen said that, regardless of how the pending intellectual-property lawsuit fares, he believes the two will have a relationship.
"At some point, the path will be clear," he said.
The company posted a 10-fold gain in new subscriber additions in the third quarter from the second quarter, a return to growth that was driven by promotions and marketing. The result has been a hit on revenue and margins because of the lower prices. But the discounts are mostly upfront, Ergen said, and shouldn't be taken as a long-term reduction in prices. He declined to provide a more long-term focus, saying it was hard to tell.
There are opportunities to improve the average revenue per user, but online content and the economy create headwinds, he said. The company's offers are lower than those of its competitors, so there is room to increase prices, he added.
Dish's turnover rate also fell, which Ergen attributed to improvement in services. The company has done a better job improving its customer service. On operating costs, he said he believes they will continue to go down, but he doesn't see them at optimal levels until next year.
The rumored deal between Comcast Corp. (CMCSK, CMCSA) and General Electric Co. (GE) on NBC Universal is a concern for Dish, Ergen said. Dish pays Comcast for programming, and he noted that costs for Comcast's Philadelphia sports content "always smelled a little bit."
Ergen argued that the loss of AT&T Inc. (T) as a reseller partner has actually benefited Dish, since it could focus its resources on regional phone companies that are more interested in long-term partnerships. He noted that it was tough selling a TV product to an AT&T customer knowing that the telecom giant would likely want to sell its own U-Verse service.
Ergen declined to talk about whether AT&T or Verizon Communications Inc. (VZ) would be interested in acquiring Dish or DaveTV Group Inc. (DTV), the only other satellite-TV company.
Ergen also backed away from the company's wireless ambitions, saying that it was one of three uses for its wireless spectrum. The use depends on the direction of the Federal Communications Commission, he said, adding that he doesn't see a large capital commitment in the near term.
By Roger Cheng
DOW JONES NEWSWIRES
NOVEMBER 9, 2009, 1:05 P.M. ET
NEW YORK (Dow Jones)--DN Corp. Chief Executive Charles Ergen said Monday that dividends are "always on the table" for the satellite-TV provider.
The comments come on the heels of Dish's $2-per-share dividend payout, which took Wall Street by surprise because the company tends to avoid returning cash to shareholders.
Dish did attempt to use the cash to make an acquisition or reinvest in the business, but couldn't find a good use for the funds, Ergen told analysts Monday. He was reluctant to spend on the business with the overhang of TiVo Inc. (TIVO) litigation still lingering.
On TiVo, Ergen said that, regardless of how the pending intellectual-property lawsuit fares, he believes the two will have a relationship.
"At some point, the path will be clear," he said.
The company posted a 10-fold gain in new subscriber additions in the third quarter from the second quarter, a return to growth that was driven by promotions and marketing. The result has been a hit on revenue and margins because of the lower prices. But the discounts are mostly upfront, Ergen said, and shouldn't be taken as a long-term reduction in prices. He declined to provide a more long-term focus, saying it was hard to tell.
There are opportunities to improve the average revenue per user, but online content and the economy create headwinds, he said. The company's offers are lower than those of its competitors, so there is room to increase prices, he added.
Dish's turnover rate also fell, which Ergen attributed to improvement in services. The company has done a better job improving its customer service. On operating costs, he said he believes they will continue to go down, but he doesn't see them at optimal levels until next year.
The rumored deal between Comcast Corp. (CMCSK, CMCSA) and General Electric Co. (GE) on NBC Universal is a concern for Dish, Ergen said. Dish pays Comcast for programming, and he noted that costs for Comcast's Philadelphia sports content "always smelled a little bit."
Ergen argued that the loss of AT&T Inc. (T) as a reseller partner has actually benefited Dish, since it could focus its resources on regional phone companies that are more interested in long-term partnerships. He noted that it was tough selling a TV product to an AT&T customer knowing that the telecom giant would likely want to sell its own U-Verse service.
Ergen declined to talk about whether AT&T or Verizon Communications Inc. (VZ) would be interested in acquiring Dish or DaveTV Group Inc. (DTV), the only other satellite-TV company.
Ergen also backed away from the company's wireless ambitions, saying that it was one of three uses for its wireless spectrum. The use depends on the direction of the Federal Communications Commission, he said, adding that he doesn't see a large capital commitment in the near term.