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Why Is Dish (DISH) Up 3.5% Since Last Earnings Report?

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A month has gone by since the last earnings report for Dish Network (DISH - Free Report) . Shares have added about 3.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Dish due for a pullback? 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 Q1 Earnings In Line, Revenues Down Y/Y

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.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

At this time, Dish has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.

Outlook

Estimates have been 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.


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