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DISH Network (DISH) to Report Q4 Earnings: What's in Store?

Zacks Equity Research

DISH Network DISH is set to report fourth-quarter 2018 results on Feb 13.

In the trailing four quarters, the company’s earnings beat the Zacks Consensus Estimate on three occasions, delivering average positive surprise of 10.4%.

In the last reported quarter, DISH reported earnings of 82 cents per share that comfortably surpassed the Zacks Consensus Estimate of 67 cents. Revenues of $3.395 billion beat the Zacks Consensus Estimate of $3.391 billion but declined 5.3% year over year.

The Zacks Consensus Estimate for fourth-quarter earnings has remained steady at 70 cents over the past 30 days, reflecting 22.8% growth year over year. The consensus mark for revenues currently stands at $3.28 billion, reflecting year-over-year decline of 5.8%.

Let’s see how things are shaping up for this announcement.

Key Factors to Watch Out

DISH’s efforts to diversify its business from being a pure-play satellite-TV operator to an Internet TV operator are yet to provide any meaningful impetus to its growth prospects.

The company continues to struggle with the persistent loss of subscribers due to stiff competition and cord-cutting in the pay-TV industry. The company is losing pay-TV subscribers to online video streaming and on-demand content providers, such as Netflix, Amazon Prime, Hulu and YouTube, among others.
 

DISH Network Corporation Price and EPS Surprise

DISH Network Corporation Price and EPS Surprise | DISH Network Corporation Quote

 

In the last reported quarter, total pay-TV subscribers were 12.656 million, down from 13.203 million in the year-ago quarter. Further, DISH TV's average monthly subscriber churn rate was 2.11%, worse than 1.46% reported in the previous quarter and 1.82% in the year-ago quarter.

Churn rate was negatively impacted by Univision’s removal of certain channels from the company’s programming line-up. The continuing Univision and AT&T disputes (for carrying HBO and Cinemax) are likely to negatively impact churn rate in the to-be-reported quarter.

Although increasing Sling TV subscriber base is a key catalyst, stiff competition in the streaming space is making it difficult for the service to negate decline in the satellite TV business.

Moreover, escalating programming and content expenses along with retransmission fees are anticipated to keep margins under pressure.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

DISH has a Zacks Rank #4 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With a Favorable Combination

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Churchill Downs CHDN has an Earnings ESP of +12.87% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMC Entertainment Holdings AMC has an Earnings ESP of +3.97% and a Zacks Rank #3.

Discovery DISCA has an Earnings ESP of +4.72% and a Zacks Rank #3.

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