Leading U.S. satellite TV operator DISH Network Corp. DISH is slated to report its second-quarter 2015 financial numbers before the opening bell on Aug 5.
Last quarter, the company posted an impressive 85.37% earnings surprise. Notably, the company surpassed the Zacks Consensus Estimate in two of the last four quarters, with an average beat of 38.52%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
DISH’s revenues may continue to remain under pressure due to its failure to cut new deals with wireless operators for the deployment of a nationwide network. This has so far been a major setback for the company. Moreover, rising programming costs and mounting debts are likely to act as headwinds. In first-quarter 2015, subscriber-related expenses crept up 4.5% year over year to $2,162.8 million.
Increasing churn rate is also a major concern for DISH and it intends to check churn with its latest Sling TV offering. Also, in May this year, the company introduced an Android TV application for Google Inc.’s Nexus player. This application can be downloaded from Google Play Store. Meanwhile, DISH’s average monthly subscriber pay-TV churn rate in the first quarter stood at 1.65% compared with 1.42% in the prior-year quarter.
Earnings Whispers
Our proven model does not conclusively show that DISH is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: Earnings ESP for DISH stands at -15.22% as the Most Accurate estimate is 39 cents while the Zacks Consensus Estimate is pegged higher at 46 cents.
Zacks Rank: DISH carries a Zacks Rank #4 (Sell). We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.
Ashford Hospitality Trust, Inc. AHT has an earnings ESP of +4.35% and a Zacks Rank #1 (Strong Buy).
Sprint Corporation S has an earnings ESP of +25.0% and a Zacks Rank #3 (Hold).
The Walt Disney Company DIS has an earnings ESP of +2.16% and a Zacks Rank #3.
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