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Is DISH Network (DISH) Poised for Strong Earnings in Q2?

Zacks Equity Research

We expect DISH Network Corp. (DISH) to beat earnings when the company reports its second quarter financial numbers on Aug 6, 2014, before the opening bell.

Last quarter, the company had posted a negative earnings surprise of 11.63%. However, the company has outpaced the Zacks Consensus Estimate in three of the past four quarters, with an average earnings beat of 30.35%. Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that DISH Network is likely to beat earnings because it has the perfect combination of two key ingredients.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +15.39%. This is because the Most Accurate estimate stands at 60 cents, whereas the Zacks Consensus Estimate is pegged lower at 52 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. 

Zacks Rank: DISH Network currently has a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

The combination of DISH Network’s Zacks Rank #3 and +15.39% ESP makes us reasonably confident of a positive earnings beat on Aug 6.

What is Driving the Better-than-Expected Earnings?

An extensive wireless spectrum portfolio and innovative product launches like that of the first wireless set-top box in the pay-TV industry will spur the company’s growth in the near future. In the month of March, DISH Network achieved yet another milestone by signing an online pay-TV deal with leading media mogul, The Walt Disney Co. The launch of such value-added services will not only drive the company’s top and bottom line higher but will also help reduce subscriber churn rate and increase average revenue per user in the coming quarters.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:

TELUS Corporation (TU) has an earnings ESP of +1.85% and bears a Zacks Rank #3.

Windstream Holdings, Inc. (WIN) has an earnings ESP of +12.50% and holds a Zacks Rank #2.

RigNet, Inc. (RNET) has an earnings ESP of +6.25% and carries a Zacks Rank #3.

Read the Full Research Report on DISH
Read the Full Research Report on TU
Read the Full Research Report on WIN
Read the Full Research Report on RNET

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