DISH Network reported first-quarter 2019 earnings of 65 cents per share, in line with the Zacks Consensus Estimate but down 7.1% year over year.
Revenues declined 7.8% year over year to $3.187 billion. The top line also lagged the Zacks Consensus Estimate of $3.192 billion.
DISH exited the reported quarter with 9.639 million DISH TV and 2.424 million Sling TV subscribers. Total Pay-TV subscribers were 12.063 million.
Segment Details
Subscriber-related revenues (98.8% of revenues) declined 8% from the year-ago quarter to $3.148 billion.
Pay-TV video and related revenues fell 7.5% to $3.098 billion. Broadband revenues plunged 33.6% year over year to $49.8 million.
Pay-TV ARPU increased 0.6% year over year to $85.03 driven by DISH TV programming package price increases in the first quarter and a rise in revenue per subscriber related to Sling TV services.
Net Pay-TV subscribers declined approximately 259K. The number was much higher than 94K subscribers lost in the year-ago quarter. Moreover, churn rate was 1.74% in the reported quarter.
However, DISH added 7K net Sling TV subscribers.
Meanwhile, equipment sales and other revenues increased 10% to $39.4 million.
United States revenues declined 7.9% year over year to $3.176 billion. Canada and Mexico revenues increased 15% from the year-ago quarter to $10.9 million.
Operating Details
In the first quarter, subscriber-related expenses declined 8.2% year over year to $2 billion. As percentage of revenues, subscriber-related expenses decreased 300 basis points (bps) on a year-over-year basis to 62.9%.
Total subscriber acquisition costs (SACs) fell 1.1% from the year-ago quarter to $193.9 million. However, as percentage of revenues, SACs increased 400 bps to 6.1%. DISH TV SAC was $828, up 17.1% year over year.
EBITDA decreased 10.9% year over year to $597 million.
Operating income fell 13.8% year over year to $456.3 million. Operating margin contracted 100 bps to 14.3%.
Balance Sheet & Cash Flow
As of Mar 31, 2019, cash, cash equivalents and current marketable investment securities were $2.393 billion compared with $2.069 billion as of Dec 31, 2018.
DISH generated $732.9 million in cash flow from operating activities compared with $751.6 million in the year-ago quarter.
Zacks Rank and Stocks to Consider
DISH currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader consumer discretionary sector are Comcast (CMCSA - Free Report) , Electronic Arts (EA - Free Report) and IMAX Corporation (IMAX - Free Report) , sporting a Zacks #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Comcast, EA and IMAX is pegged at 12.8%, 16.5% and 17.5%, respectively.
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DISH Network reported first-quarter 2019 earnings of 65 cents per share, in line with the Zacks Consensus Estimate but down 7.1% year over year.
Revenues declined 7.8% year over year to $3.187 billion. The top line also lagged the Zacks Consensus Estimate of $3.192 billion.
DISH exited the reported quarter with 9.639 million DISH TV and 2.424 million Sling TV subscribers. Total Pay-TV subscribers were 12.063 million.
Segment Details
Subscriber-related revenues (98.8% of revenues) declined 8% from the year-ago quarter to $3.148 billion.
Pay-TV video and related revenues fell 7.5% to $3.098 billion. Broadband revenues plunged 33.6% year over year to $49.8 million.
Pay-TV ARPU increased 0.6% year over year to $85.03 driven by DISH TV programming package price increases in the first quarter and a rise in revenue per subscriber related to Sling TV services.
Net Pay-TV subscribers declined approximately 259K. The number was much higher than 94K subscribers lost in the year-ago quarter. Moreover, churn rate was 1.74% in the reported quarter.
However, DISH added 7K net Sling TV subscribers.
Meanwhile, equipment sales and other revenues increased 10% to $39.4 million.
United States revenues declined 7.9% year over year to $3.176 billion. Canada and Mexico revenues increased 15% from the year-ago quarter to $10.9 million.
Operating Details
In the first quarter, subscriber-related expenses declined 8.2% year over year to $2 billion. As percentage of revenues, subscriber-related expenses decreased 300 basis points (bps) on a year-over-year basis to 62.9%.
Total subscriber acquisition costs (SACs) fell 1.1% from the year-ago quarter to $193.9 million. However, as percentage of revenues, SACs increased 400 bps to 6.1%. DISH TV SAC was $828, up 17.1% year over year.
EBITDA decreased 10.9% year over year to $597 million.
Operating income fell 13.8% year over year to $456.3 million. Operating margin contracted 100 bps to 14.3%.
Balance Sheet & Cash Flow
As of Mar 31, 2019, cash, cash equivalents and current marketable investment securities were $2.393 billion compared with $2.069 billion as of Dec 31, 2018.
DISH generated $732.9 million in cash flow from operating activities compared with $751.6 million in the year-ago quarter.
Zacks Rank and Stocks to Consider
DISH currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader consumer discretionary sector are Comcast (CMCSA - Free Report) , Electronic Arts (EA - Free Report) and IMAX Corporation (IMAX - Free Report) , sporting a Zacks #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Comcast, EA and IMAX is pegged at 12.8%, 16.5% and 17.5%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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