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DISH Network (DISH) Q2 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 second-quarter 2017 financial numbers before the opening bell on Jul 20.
In the last reported quarter, DISHNetwork delivered a positive earnings surprise of 13.43%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 7.79%.
Share price of DISH Network has risen 9.51% in the past three months, outperforming the Zacks categorized Cable TV industry’s decline of 0.84%.
Let’s see how things are shaping up for this announcement.
Factors at Play
We are impressed with DISH Network’s efforts to diversify its business model from 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. The company's flexible cash and liquidity position allows it to invest extensively. We can witness similar flexibility in the upcoming quarterly results. The launch of Air TV Player bodes well for DISH Network’s prospects.
Moreover, the company has been trying to lure more customers for its Internet TV service, Sling TV, by offering it at a reasonable rate along with the addition of other premium networks such as Showtime and related channels. Despite such efforts, the company has failed to gain subscribers in the broadband and pay-TV segment.
As of Mar 31, DISH Network had approximately 13.528 million pay-TV subscribers compared with 13.874 million at the end of 2016. The company lost 143,000 pay-TV subscribers in first-quarter 2017 compared with a loss of 23,000 at the end of Dec 2016.
Moreover, DISH Network lost 25,000 broadband subscribers in first-quarter 2017 compared with a gain of 5,000 in the year-ago quarter. As of Mar 31, the company had 555,000 broadband subscribers compared with 628,000 at the end of 2016. Stiff competition might have resulted in subscriber loss, which is a drag for the company. We expect DISH Network to recover from this subscriber loss in the to-be reported quarter.
DISH Network’s top-line growth continues to remain under pressure. The company has failed to strike any deal with wireless operators to deploy a nationwide wireless network which is a major concern. Moreover, the company may be affected by its inability 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.
The telemarketing lawsuit which amounted to a fine-cum-damage recovery cost of $280 million, to be paid to the U.S. government and four states, was a major setback for the company.
Earnings Whispers
Our proven model does not conclusively show that DISH Network is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have 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 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 75 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 0.00% ESP makes surprise prediction difficult.
Meanwhile, 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 deliver an earnings beat this quarter.
Rogers Communications Inc. (RCI - Free Report) is scheduled to report second-quarter 2017 results on Jul 20, before the market opens. The company has an Earnings ESP of +1.41% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Penn National Gaming, Inc. (PENN - Free Report) is set to release second-quarter 2017 results on Jul 27. The company has an Earnings ESP of +4.35% and holds a Zacks Rank #2. The company’s earnings surpassed the Zacks Consensus Estimate in all the previous four quarters, with an average beat of 114.19%.
Polaris Industries Inc. (PII - Free Report) will release its second quarter 2017 financial results on Jul 20.The company has an Earnings ESP of +4.63% and carries a Zacks Rank #2. The company’s earnings surpassed the Zacks Consensus Estimate in all the previous four quarters, with an average beat of 5.68%.
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DISH Network (DISH) Q2 Earnings: Is a Surprise in Store?
DISH Network Corp. , the second largest satellite TV operator in the U.S., is expected to report second-quarter 2017 financial numbers before the opening bell on Jul 20.
In the last reported quarter, DISH Network delivered a positive earnings surprise of 13.43%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 7.79%.
Share price of DISH Network has risen 9.51% in the past three months, outperforming the Zacks categorized Cable TV industry’s decline of 0.84%.
Let’s see how things are shaping up for this announcement.
Factors at Play
We are impressed with DISH Network’s efforts to diversify its business model from 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. The company's flexible cash and liquidity position allows it to invest extensively. We can witness similar flexibility in the upcoming quarterly results. The launch of Air TV Player bodes well for DISH Network’s prospects.
Moreover, the company has been trying to lure more customers for its Internet TV service, Sling TV, by offering it at a reasonable rate along with the addition of other premium networks such as Showtime and related channels. Despite such efforts, the company has failed to gain subscribers in the broadband and pay-TV segment.
As of Mar 31, DISH Network had approximately 13.528 million pay-TV subscribers compared with 13.874 million at the end of 2016. The company lost 143,000 pay-TV subscribers in first-quarter 2017 compared with a loss of 23,000 at the end of Dec 2016.
Moreover, DISH Network lost 25,000 broadband subscribers in first-quarter 2017 compared with a gain of 5,000 in the year-ago quarter. As of Mar 31, the company had 555,000 broadband subscribers compared with 628,000 at the end of 2016. Stiff competition might have resulted in subscriber loss, which is a drag for the company. We expect DISH Network to recover from this subscriber loss in the to-be reported quarter.
DISH Network’s top-line growth continues to remain under pressure. The company has failed to strike any deal with wireless operators to deploy a nationwide wireless network which is a major concern. Moreover, the company may be affected by its inability 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.
The telemarketing lawsuit which amounted to a fine-cum-damage recovery cost of $280 million, to be paid to the U.S. government and four states, was a major setback for the company.
Earnings Whispers
Our proven model does not conclusively show that DISH Network is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have 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 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 75 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 0.00% ESP makes surprise prediction difficult.
Meanwhile, 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 deliver an earnings beat this quarter.
Rogers Communications Inc. (RCI - Free Report) is scheduled to report second-quarter 2017 results on Jul 20, before the market opens. The company has an Earnings ESP of +1.41% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Penn National Gaming, Inc. (PENN - Free Report) is set to release second-quarter 2017 results on Jul 27. The company has an Earnings ESP of +4.35% and holds a Zacks Rank #2. The company’s earnings surpassed the Zacks Consensus Estimate in all the previous four quarters, with an average beat of 114.19%.
Polaris Industries Inc. (PII - Free Report) will release its second quarter 2017 financial results on Jul 20.The company has an Earnings ESP of +4.63% and carries a Zacks Rank #2. The company’s earnings surpassed the Zacks Consensus Estimate in all the previous four quarters, with an average beat of 5.68%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>