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Dish (DISH) Up 9.7% Since Last Earnings Report: Can It Continue?

Zacks Equity Research
Simpson Manufacturing (SSD) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

A month has gone by since the last earnings report for Dish Network (DISH). Shares have added about 9.7% 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 drivers.

DISH Network Q4 Results Hurt By Subscriber Loss

DISH Network reported fourth-quarter 2018 earnings of 64 cents per share that missed the Zacks Consensus Estimate of 67 cents. The company had reported earnings of $2.64 in the year-ago quarter.

Moreover, revenues declined 4.9% year over year to $3.31 billion. However, the figure beat the Zacks Consensus Estimate of $3.28 billion.

DISH exited the reported quarter with 9.90 million DISH TV and 2.42 million Sling TV subscribers. Total Pay-TV subscribers were 12.32 million.

Net Pay-TV subscribers declined approximately 334K. The number was much higher than 39K subscribers lost in the year-ago quarter.

Operating income rallied 25.3% year over year to $562.7 million. Operating margin expanded 400 basis points (bps) to 16.6% in the quarter.

2018 Details

In 2018, revenues declined 5.4% year over year to $13.62 billion. Earnings plunged 26.3% year over year to $3 per share.

Gross new DISH TV subscriber activations were roughly 1.114 million. Pay-TV average revenue per user (ARPU) was $85.46, down from $86.43 reported in 2017. DISH TV's average monthly subscriber churn rate was 1.78%, unchanged from 2017.

Sling TV subscribers increased 0.205 million in 2018. However, the number was much lower than 0.711 million added in the previous year. Further, subscriber acquisition cost (SAC) was $759 in 2018 compared with $751 in 2017.

How Have Estimates Been Moving Since Then?

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

VGM Scores

At this time, Dish has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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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