Shares of the satellite network soar on trio of announcements; Michael Kelly named to head struggling video chain
The Dish Network — Blockbuster's new owner — made a pair of announcements coinciding with a stellar quarterly earnings report on Monday, sending shares in the company soaring.
First, the nation's second-largest satellite operator named Michael Kelly, its EVP of media sales, as president of Blockbuster — a week after Dish paid $320 million to acquire the struggling video chain.
"Michael was the visionary behind our acquisition of Blockbuster," Dish CEO Charlie Ergen said. "His leadership will be key to returning Blockbuster to profitability and improving the experience we offer to consumers across the U.S. and globally."
During a conference call with investors, Ergen didn't say much about the company's plans for Blockbuster, other than disclosing that Dish would be meeting with Hollywood studios over the next few weeks to discuss its strategy.
Dish also announced a settlement in a seven-year patent lawsuit with TiVo, agreeing to pay the DVR pioneer $500 million to end the dispute.
“We are pleased to put this litigation behind us and move forward,” Ergen said. “We are excited to work with TiVo to help develop our Blockbuster video service. Resolving the patent infringement case allows us to further engage with TiVo on a variety of exciting strategic initiatives, like Blockbuster, where we are uniquely positioned to collaborate."
Dish's net income for the first quarter was $549 million — or $1.22 a share — up from $231 million, or 52 cents, a year ago. Revenue climbed 5.5 percent to $3.22 billion, as Dish added 58,000 subscribers during the quarter — though that was down from the 237,000 subscribers it added last year.
Shares of Dish Network jumped more than 19 percent on the news, up more than $4.00 to $29.10 per share during morning trading on Wall Street.