Dish Network Corp., the nation's second-largest satellite TV broadcaster, on Monday reported that its first-quarter net income more than doubled, helped by a patent settlement with TiVo Inc.
Dish's stock jumped on news of the settlement, which removes a measure of uncertainty for investors. Shares rose $4.75, or 19 percent, to close at $29.79 Monday. They hit a three-year high of $29.95 in opening trading.
The Englewood, Colo., company also reported adding a net 58,000 subscribers after three quarters of losses, bringing its total to 14.2 million.
Dish is initially paying TiVo, the maker of digital video recorders, $290 million. Dish had $517 million tucked away in a litigation reserve fund, and is now returning $335 million of that to its coffers.
That boosted Dish's first-quarter net income to $549 million, or $1.22 per share, up from $231 million, or 52 cents per share, a year earlier.
Analysts on average expected Dish to earn 68 cents per share in the first quarter, as polled by FactSet, but that estimate excludes the litigation settlement, so a relevant comparison was not immediately available.
In total, Dish and EchoStar Corp., a Dish spin-off that makes set-top boxes, will pay TiVo $500 million.
Dish and EchoStar will make the remaining $200 million in payments in installments until 2017, with Dish paying 95 percent.
TiVo sued Dish in 2004, and has scored several victories in court. Two weeks ago, it won an injunction forcing Dish to turn off some of its older set-top boxes with DVR functions.
Dish's first-quarter revenue rose 5.5 percent to $3.22 billion on higher monthly fees.
Dish also said it has appointed one of its executives, Michael Kelly, to head Blockbuster, the video-store chain the company bought out of bankruptcy.
"Michael was the visionary behind our acquisition of Blockbuster," Charlie Ergen, Dish's chairman and CEO, said in a statement.
Previously, Kelly was executive vice president of Dish's Commercial Services division and the Direct Sales and Media Sales organizations.