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DISH Network (DISH) Q3 Earnings Beat, Revenues Down Y/Y

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DISH Network (DISH - Free Report) reported third-quarter 2019 earnings of 66 cents per share, beating the Zacks Consensus Estimate by 11.9%. The figure, however, declined 19.5% year over year.

Revenues also declined 6.7% year over year to $3.17 billion but surpassed the consensus mark by 0.9%.

The United States revenues declined 6.6% year over year to $3.16 billion. Canada and Mexico revenues decreased 21.9% from the year-ago quarter to $11.5 million.

DISH exited the reported quarter with 9.494 million DISH TV subscribers, down 7.7%, and 2.686 million Sling TV subscribers, up 13.3%. Total Pay-TV subscribers were 12.180 million, down 3.8% year over year.

Quarter Details

Subscriber-related revenues (98.4% of revenues) declined 6.9% from the year-ago quarter to $3.12 billion. Equipment sales and other revenues increased 11.8% to $51.2 million.

Pay-TV video and related revenues fell 6.6% to $3.17 billion. Broadband revenues dropped 23.6% year over year to $46.3 million.

The company added approximately 148K net Pay-TV subscribers in the reported quarter. DISH had lost roughly 341K net Pay-TV subscribers in the year-ago quarter.
 

 

Moreover, DISH added nearly 214K net Sling TV subscribers in the third quarter compared with 26K net Sling TV subscribers added in the year-ago quarter.

However, Pay-TV ARPU edged down 1.2% year over year to $85.29. Additionally, the churn rate was 1.69% compared with the year-ago quarter’s 2.11%.

In the third quarter, subscriber-related expenses declined 8.9% year over year to $1.93 billion. As percentage of revenues, subscriber-related expenses shrunk 150 basis points (bps) on a year-over-year basis to 61.1%.

Total subscriber acquisition costs (SACs) flared up 52.9% from the year-ago quarter to $285.8 million. As percentage of revenues, SACs expanded 350 bps to 9%.

DISH TV SAC was $827, up 14.7% year over year primarily due to rise in advertising, installation costs per activation and hardware costs.

EBITDA decreased 19.5% year over year to $597.4 million. EBITDA margin contracted 300 bps on a year-over-year basis to 18.9%.

Operating income fell 16.7% year over year to $468.9 million. Operating margin contracted 180 bps to 14.8%.

Balance Sheet

As of Sep 30, 2019, cash, cash equivalents and current marketable investment securities were $1.66 billion compared with $2.73 billion as of Jun 30, 2019.

Zacks Rank & Stocks to Consider

DISH currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader consumer discretionary sector include Cumulus Media (CMLS - Free Report) , Entercom Communications (ETM - Free Report) and Liberty Media Corp (FWONK - Free Report) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

While both Cumulus and Liberty Media are set to release quarterly results on Nov 11, Entercom is scheduled to report on Nov 8.


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