DISH Network (DISH) Q2 Earnings: Is Disappointment in Store?

DISH Network DISH is set to report second-quarter 2018 results on Aug 3. In the trailing four quarters, the company’s earnings have missed the Zacks Consensus Estimate on three occasions, delivering an average negative surprise of 3.80%.

In the last reported quarter, DISH delivered a negative earnings surprise of 2.78%. Revenues of $3.46 billion lagged the Zacks Consensus Estimate of $3.50 billion and slumped 6% year over year.

The Zacks Consensus Estimate for second-quarter earnings has remained steady at 69 cents over the last seven days, unchanged year over year. The consensus mark for revenues currently stands at $3.43 billion, reflecting year-over-year decline of 5.9%.

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

Key Factors to Watch Out For

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 as well as cord-cutting in the pay-TV industry. DISH is losing pay-TV subscribers to online video streaming and on-demand content providers such as Netflix NFLX, Amazon Prime, Hulu.com and YouTube among others.

In the last reported quarter, total pay-TV subscribers were 13.148 million, down from 13.528 million reported in the year-ago quarter.

However, DISH’s focus on providing an improved customer experience would limit churn rate. Moreover, increasing subscriber base of Sling TV should boost top-line growth in the to-be-reported quarter.

Nevertheless, escalating programming and content expenses along with retransmission fees would keep margins under pressure. DISH could not afford to raise price for Sling TV in order to maintain existing subscriber base and attract new ones. This would further hurt profitability due to higher content costs.

Moreover, DISH’s top-line growth continues to remain under pressure due to its failure to strike any deal with wireless operators to deploy a nationwide wireless network.

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 #3 but its Earnings ESP is -1.56%. Consequently, our proven model does not conclusively show that the company is likely to deliver a positive surprise this quarter. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are couple of stocks that you may want to consider as our model shows these have the right combination of elements to deliver an earnings beat in the to-be reported quarter.

Turtle Beach HEAR has an Earnings ESP of +57.14% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vishay Intertechnology VSH has an Earnings ESP of +2.41% and a Zacks Rank #1.

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