DISH Network (DISH - Free Report) is slated to report fourth-quarter 2017 results on Feb 21.
The Zacks Consensus Estimate for revenues is pegged at $3.54 billion, reflecting year-over-year decline of 4.9%. The consensus estimate for earnings is pegged at 56 cents per share, indicating year-over-year decline of 20%.
The company has a mixed earnings surprise history. Earnings lagged the Zacks Consensus Estimate in two of the previous four quarters and surpassed the same in the remaining two quarters, with an average beat of 1.32%.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence Q4 Earnings
DISH Network is looking for wireless opportunities with its extensive portfolio of wireless spectrum, valued at around $50 billion. Moreover, we appreciate 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. Launch of the mobile app, DISH Music bodes well.
The company has also inked a multi-year program licensing deal with CBS Corp (CBS - Free Report) , after resolving a three-day blackout. The latest deal not only restores CBS’ local stations but also adds Showtime, CBS Sports Network, Pop, and Smithsonian Channel to the company’s satellite-TV service.
Multi-year agreement with Lilly Broadcasting for carriage of the broadcaster's channels in Puerto Rico, U.S. Virgin Islands, and three other markets in Pennsylvania, New York and Hawaii, looks good for DISH Network’s prospects.
However, in the past three months, the company’s shares have declined 8.7% compared with the industry’s gain of 4.3%.
Moreover, DISH Network continues to lose broadband and pay-TV subscribers due to stiff competition and cord cutting. Notably, online video streaming providers such as Netflix (NFLX - Free Report) , Hulu.com, YouTube etc., have become a severe threat to cable-TV operators because of their extremely cheap source of TV programming. The Zacks Consensus Estimate for DISH Network’s broadband subscribers is 419,000 million for fourth-quarter 2017 compared with 459,000 in third-quarter 2017. Pay-TV subscriber estimates of 13.181 million are lower than 13.203 million and 13.671 million in third-quarter 2017 and fourth-quarter 2016, respectively.
The company’s liquidity position is disappointing. Moreover, regulatory fines, programming and content expenses, retransmission fees, persistent loss of subscribers and failure to strike any deal with wireless operators are other risks. Penalty of $280 million in a telemarketing lawsuit remains a woe.
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 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 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 56 cents. You can uncover the best stocks to buy or sell before they’re reported with the 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.
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.
Stock to Consider
AMC Entertainment (AMC - Free Report) from the Zacks Consumer Discretionary sector has the right combination of elements to post an earnings beat in fourth-quarter 2017 when it reports on Mar 1. The company has an Earnings ESP of +4.65% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters with an average beat of 120.2%.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>