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What's in the Cards for DISH Network (DISH) Earnings in Q3?

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DISH Network is set to report third-quarter 2018 results on Nov 7. In the trailing four quarters, the company’s earnings beat the Zacks Consensus Estimate on two occasions, delivering average positive surprise of 3.6%.

In the last reported quarter, DISH reported earnings of 83 cents per share that comfortably surpassed the Zacks Consensus Estimate of 69 cents. Revenues of $3.46 billion beat the Zacks Consensus Estimate of $3.43 billion but declined 5% year over year.

The Zacks Consensus Estimate for third-quarter earnings has remained steady at 67 cents over the past seven days, reflecting 17.5% growth year over year. The consensus mark for revenues currently stands at $3.39 billion, reflecting year-over-year decline of 5.4%.

Let’s see how things are shaping up for this announcement.

Key Factors to Watch Out

DISH’s efforts to diversify its business from being a pure-play satellite-TV operator to an Internet TV operator are yet to provide any meaningful impetus to its growth prospects.

The company continues to struggle with the persistent loss of subscribers due to stiff competition and cord-cutting in the pay-TV industry. DISH is losing pay-TV subscribers to online video streaming and on-demand content providers, such as Netflix, Amazon Prime, Hulu and YouTube, among others.
 

 

In the last reported quarter, total pay-TV subscribers were 12.997 million, down from 13.148 million in the year-ago quarter.

Moreover, escalating programming and content expenses along with retransmission fees are anticipated to keep margins under pressure.

Further, DISH’s top-line growth remains under pressure due to its failure to strike any deal with wireless operators to deploy a nationwide wireless network.

Nevertheless, despite stiff competition, increasing Sling TV subscriber base is a key catalyst. In the last reported quarter, average revenues per user (ARPU) of Sling TV were driven by a favorable mix of customers taking higher-priced packages and strong growth in ad-sales.

Although we expect the momentum to continue, orange package price increase can be detrimental to subscriber growth. Moreover, the unavailability of Univision’s three-Spanish language networks is likely to negatively impact churn rate in the to-be-reported quarter.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

DISH has a Zacks Rank #2 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With a Favorable Combination

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Himax Technologies (HIMX - Free Report) has an Earnings ESP of +66.67% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NetApp (NTAP - Free Report) has an Earnings ESP of +0.83% and a Zacks Rank #1.

The Trade Desk (TTD - Free Report) has an Earnings ESP of +0.29% and a Zacks Rank #1.
 

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