Dish Network will close 500 underperforming and unprofitable Blockbuster video stores in the coming weeks, accounting for about a third of its stores.
The announcement came as the company announced its fourth quarter profits increased 24 percent to $313 million in the fourth quarter. It reversed subscriber losses to pick up a net 22,000 subscribers thanks in part to its new Blockbuster-branded services. It acquired Blockbuster last year.
The closures will occur in the first quarter of this year, the company said. The company will try to expand its Dish Services offerings in remaining stores. It currently sells Dish Network sales in about 150 stores.
Dish initially disclosed the closures deep in a 300-page SEC filing after providing only a general outline of its earnings in a news release early Thursday. It later expanded on the planned closings in its earnings call.
The company reported total revenue of $3.63 billion for the quarter, a 13 percent increase over the $3.21 billion for the fourth quarter of 2010. Its $313 million in net income compared to $252 million in the 2010 fourth quarter. Diluted earnings per share were $0.70, compared with $0.56. Analysts had forecast earnings of 61 cents on revenue of $3.62 billion.
The company lost 166,000 net subscribers in 2011, but the gain in the fourth quarter brought its total subscribers to about 13.97 million.
"By introducing new Blockbuster-branded services, we've begun to turn the tide in subscriber losses while continuing to face increased competitive pressures," said president and CEO Joe Clayton.
As of 10:35 a.m. ET Thursday, shares of the company's stock were up 1.03 percent to $29.46.
For the year, Dish reported total revenue of $14.05 billion compared with $12.64 billion for 2010, an increase of 11 percent. Net income for 2011 totaled $1.52 billion, compared with $985 million for 2010. Diluted earnings per share were $3.39 for 2011 compared with $2.20.