It has been about a month since the last earnings report for DISH Network Corporation (DISH - Free Report) . Shares have lost about 1.3% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is DISH due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
DISH Network delivered first-quarter 2018 earnings of 70 cents per share that missed the Zacks Consensus Estimate by couple of cents and declined 7.9% year over year.
Revenues slumped 6% year over year to $3.46 billion, lagging the Zacks Consensus Estimate of almost $3.50 billion.
Subscriber-related revenues (99% of revenues) declined 6.1% from the year-ago quarter to $3.42 billion. Pay-TV video and related revenues fell 5.3% to $3.35 billion. Broadband revenues plunged 30.2% year over year to $75.1 million.
Equipment sales and other revenues dipped 1% to $35.8 million.
United States contributed 99.7% of revenues which declined 6% year over year to $3.45 billion. Canada and Mexico contributed the rest of the revenues which fell 1% from the year-ago quarter to $9.5 million.
Subscriber Loss Continues
DISH exited the quarter with 10.845 million DISH TV subscribers and 2.303 million Sling TV subscribers. Total Pay-TV subscribers were 13.148 million, down from 13.528 million reported in the year-ago quarter.
Net Pay-TV subscribers declined approximately 94K as compared with a decline of roughly 143K in the year-ago quarter. Pay-TV average revenue per user (ARPU) declined from year-ago quarter’s figure of $86.55-$84.50.
Net DISH TV subscribers declined approximately 185K and Sling TV subscribers increased almost 91K.
DISH TV's average monthly subscriber churn rate was 1.47% against year-ago quarter’s 1.92%.
In the first quarter, subscriber-related expenses declined 2.6% year over year to $2.18 billion. However, as percentage of revenues, subscriber-related expenses expanded 220 basis points (bps) on a year-over-year basis to 63.2%.
Total subscriber acquisition costs (SACs) plunged 32.4% from the year-ago quarter to $196 million. As percentage of revenues, SACs declined 220 bps to 5.7%.
Operating income declined 12.8% year over year to $529.5 million. Operating margin fell 120 bps to 15.3% in the reported quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2018, cash & cash equivalents (including marketable investment securities) were $2.35 billion as compared with $2.05 billion as of Dec 31, 2017.
Cash flow from operating activities was $751.6 million, while free cash flow was $387 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. There have been five revisions higher for the current quarter compared to two lower.
DISH Network Corporation Price and Consensus
At this time, DISH has a subpar Growth Score of D, however its Momentum is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and momentum investors.
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, DISH has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.