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DISH Network (DISH) Q1 Earnings Lag, User Base Declines Y/Y

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DISH Network’s (DISH - Free Report) first-quarter 2020 earnings of 13 cents per share missed the Zacks Consensus Estimate by 77.2% and also plunged 80% year over year.

Revenues inched up 0.9% year over year to $3.22 billion and also surpassed the consensus mark by 2.9%.

The United States revenues climbed 0.8% year over year to $3.20 billion. Canada and Mexico revenues surged 46.4% from the year-ago quarter to $15.9 million.

DISH exited the reported quarter with 9.012 million DISH TV subscribers, down 6.1%, and 2.311 million Sling TV subscribers, down 4.7%. Total Pay-TV subscribers were 11.323 million, down 6.1% year over year.

It goes without saying that the coronavirus adversely impacted DISH’s first-quarter results. The pandemic caused severe disruption in certain commercial segments served by the company including the hospitality and airline industries.
 

 

Moreover, in a bid to avoid charging commercial customers for services that were no longer viewed by them, DISH pulled the plug on services or provided a temporary rate relief.

Those commercial accounts including the ones that DISH expects to disconnect represent roughly 250,000 subscribers, which DISH removed from its ending Pay-TV subscriber count as of Mar 31, 2020.

Top-Line Details

Subscriber-related revenues (98.4% of revenues) increased 0.6% from the year-ago quarter to $3.17 billion. Equipment sales and other revenues surged 30.4% to $51.3 million.

Pay-TV video and related revenues climbed 1.1% to $3.13 billion. Equipment sales and other revenues jumped 30.4% year over year to $51.3 million. However, broadband revenues dropped 29.5% year over year to $35.1 million.

The company lost 413K net Pay-TV subscribers in the reported quarter compared with 259K lost a year ago. Moreover, DISH lost nearly 281K net Sling TV subscribers and 132K DISH TV subscribers.

However, Pay-TV ARPU increased 4.4% year over year to $88.76. Additionally, the churn-out rate was 1.54% compared with the year-ago quarter’s 1.74%.

Operating Details

In the first quarter, subscriber-related expenses dipped 2.2% year over year to $1.96 billion. As a percentage of revenues, subscriber-related expenses declined 200 basis points (bps) on a year-over-year basis to 60.9%.

Subscriber acquisition costs (SACs) flared up 30.9% from the year-ago quarter to $253.9 million. As a percentage of revenues, SACs expanded 180 bps to 7.9%.

DISH TV SAC was $861, up 4% year over year.

EBITDA dropped 52% year over year to $286.3 million. Operating income also plunged 68.4% year over year to $144.1 million.

Balance Sheet

As of Mar 31, 2020, cash, cash equivalents and current marketable investment securities were $2.83 billion compared with $2.44 billion as of Dec 31, 2019.

Total debt as of Mar 31, 2020 was $14.15 billion compared with $14.14 billion as of Dec 31, 2019.


Zacks Rank & Other Stocks to Consider

DISH currently carries a Zacks Rank #2 (Buy). Electronic Arts (EA - Free Report) , Netflix (NFLX - Free Report) and Roku (ROKU - Free Report) are some other stocks worth considering in the broader consumer discretionary sector. While Electronic Arts sports a Zacks Rank #1 (Strong Buy), both Netflix and Roku carry the same Zacks Rank as DISH. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for EA, Netflix and Roku is pegged at 8.2%, 30% and 11.5%, respectively.

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