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DISH Network (DISH) Q1 Earnings: Is a Surprise in Store?
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DISH Network Corp. – the second largest satellite TV operator in the U.S. – is expected to report first-quarter 2017 financial numbers before the opening bell on Apr 26.
Last quarter, DISHNetwork posted a positive earnings surprise of 6.06%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 11.74%.
Let’s see how things are shaping up for this announcement.
Factors at Play
DISH Network’s top-line growth may be under pressure as it has failed to strike any deal with wireless operators to deploy a nationwide wireless network. Persistent loss of subscribers is also niggling. Moreover, the company may be affected by its failure to renew long-term programming contracts on favorable pricing and other economic terms. Escalating programming and content expenses as well as retransmission fees may also hurt the company’s margins.
Moreover, shares of DISH Network declined by 3.1% in the past three months, compared with the Zacks categorized Cable TV industry’s growth of 7.5% in the same time frame.
We are, however, impressed with DISH Network’s efforts to diversify its business model from being a pure-play satellite-TV operator to an Internet TV operator. This should help the company counter competitive threats from low-cost video streaming operators. In fact, the company gained 28,000 pay-TV subscribers in the reported quarter, owing to the popularity of its Internet TV service – Sling TV – which offers services at a reasonable rate. The flexible cash and liquidity position of the company further opens up scope for investments. Meanwhile, the launch of Air TV Player bodes well.
Earnings Whispers
Our proven model does not conclusively show that DISH Networkis likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: DISHNetwork has an Earnings ESP of -1.49%. This is because the Most Accurate estimate stands at 66 cents while the Zacks Consensus Estimate is pegged higher at 67 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DISH Network has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies in the Zacks-categorized broader Consumer Discretionary sector — which houses DISH Network — that have the right combination of elements to post an earnings beat this quarter.
Charter Communications’ earnings beat the Zacks Consensus Estimate in three of the previous four quarters, with an average positive surprise of 79.71%.
Cinemark Holdings Inc. (CNK - Free Report) is set to release first-quarter 2017 results on May 3. The company has an Earnings ESP of +3.39% and a Zacks Rank #3. Cinemark Holdings’ earnings beat the Zacks Consensus Estimate in three of the previous four quarters, with an average positive surprise of 14.90%.
AMC Networks Inc. (AMCX - Free Report) is set to release first-quarter 2017 results on May 4. The company has an Earnings ESP of +1.02% and a Zacks Rank #1. Its earnings surpassed the Zacks Consensus Estimate only in the last reported quarter.
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DISH Network (DISH) Q1 Earnings: Is a Surprise in Store?
DISH Network Corp. – the second largest satellite TV operator in the U.S. – is expected to report first-quarter 2017 financial numbers before the opening bell on Apr 26.
Last quarter, DISH Network posted a positive earnings surprise of 6.06%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 11.74%.
Let’s see how things are shaping up for this announcement.
Factors at Play
DISH Network’s top-line growth may be under pressure as it has failed to strike any deal with wireless operators to deploy a nationwide wireless network. Persistent loss of subscribers is also niggling. Moreover, the company may be affected by its failure to renew long-term programming contracts on favorable pricing and other economic terms. Escalating programming and content expenses as well as retransmission fees may also hurt the company’s margins.
Moreover, shares of DISH Network declined by 3.1% in the past three months, compared with the Zacks categorized Cable TV industry’s growth of 7.5% in the same time frame.
We are, however, impressed with DISH Network’s efforts to diversify its business model from being a pure-play satellite-TV operator to an Internet TV operator. This should help the company counter competitive threats from low-cost video streaming operators. In fact, the company gained 28,000 pay-TV subscribers in the reported quarter, owing to the popularity of its Internet TV service – Sling TV – which offers services at a reasonable rate. The flexible cash and liquidity position of the company further opens up scope for investments. Meanwhile, the launch of Air TV Player bodes well.
Earnings Whispers
Our proven model does not conclusively show that DISH Networkis likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: DISH Network has an Earnings ESP of -1.49%. This is because the Most Accurate estimate stands at 66 cents while the Zacks Consensus Estimate is pegged higher at 67 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DISH Network has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
DISH Network Corporation Price and EPS Surprise
DISH Network Corporation Price and EPS Surprise | DISH Network Corporation Quote
Key Picks
Here are some companies in the Zacks-categorized broader Consumer Discretionary sector — which houses DISH Network — that have the right combination of elements to post an earnings beat this quarter.
Charter Communications Inc. (CHTR - Free Report) is slated to release first-quarter 2017 results on May 2. The company has an Earnings ESP of +6.06% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Charter Communications’ earnings beat the Zacks Consensus Estimate in three of the previous four quarters, with an average positive surprise of 79.71%.
Cinemark Holdings Inc. (CNK - Free Report) is set to release first-quarter 2017 results on May 3. The company has an Earnings ESP of +3.39% and a Zacks Rank #3. Cinemark Holdings’ earnings beat the Zacks Consensus Estimate in three of the previous four quarters, with an average positive surprise of 14.90%.
AMC Networks Inc. (AMCX - Free Report) is set to release first-quarter 2017 results on May 4. The company has an Earnings ESP of +1.02% and a Zacks Rank #1. Its earnings surpassed the Zacks Consensus Estimate only in the last reported quarter.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>