Earnings Preview: Dish Network - Analyst Blog
November 02 2012 - 9:00AM
Zacks
Dish Network Corp.
(DISH) is slated to release its third-quarter 2012 earnings results
on Tuesday, November 6, before the opening bell. The Zacks
Consensus Estimate for the reported quarter is pegged at $0.55,
representing a decline of 22.13% from the year-ago quarter.
With respect to earnings surprises,
Dish Network has outperformed the Zacks Consensus Estimate in two
of the last four quarters with an average beat of 4.26%.
Second Quarter
Recap
On August 8, Dish Network reported
its second-quarter 2012 financial results. Adjusted earnings per
share (excluding special items) of 59 cents in the second quarter
were shy of the Zacks Consensus Estimate of 63 cents. Quarterly
GAAP net income was approximately $225.7 million or 50 cents per
share compared with a net income of $334.8 million or 75 cents per
share in the prior-year quarter.
Dish Network posted quarterly total
revenue of about $3,571.8 million, down 0.5% year over year and
also below the Zacks Consensus Estimate of $3,650 million.
Second-quarter 2012 operating income plummeted by 34.8% to $468.4
million while, quarterly EBITDA was around $760.2 million compared
with $935 million in the year-ago quarter.
Agreement of Estimate
Revisions
Over the last one month, out of the
total 14 estimates, three were revised upward while two moved in
the opposite direction for the third quarter. For the fourth
quarter of 2012, out of the total 13 estimates, no upward revision
was witnessed, while two moved downward over the same time
frame.
In the last 30 days, out of the
total 10 estimates, there were two upward revisions while the same
number of estimates moved in the opposite direction for 2012. For
2013, out of the total 14 estimates, three estimates moved north,
while four moved south over the same time period.
Magnitude of Estimate
Revisions
Over the last 30 days, the current
Zacks Consensus Estimate has remained unchanged at 55 cents for the
third and fourth quarter of 2012. However, the current Zacks
Consensus Estimate improved by a penny for 2012 over the last 30
days, while the estimate has deteriorated by 5 cents to $2.45 for
2013 over the same time frame.
Recommendation
DISH Network is transforming itself
from a low-priced leader in the U.S. pay-TV industry to a premium
service provider to reduce its subscribers’ churn rate. Innovative
features like the AUTO HOP technology that enables any DISH Network
subscriber to record prime time TV programming from four major
networks could act as a value addition for its customers thereby
driving subscriber growth and retention. Additionally, the new
movie streaming services that DISH Network started after its
acquisition of Blockbuster movie chain have not only led to better
overall pay-TV services and increased customer loyalty but will
also boost subscriber growth in the upcoming quarters.
However, the company faces stiff
competition from DIRECTV (DTV) and other cable TV
operators. Furthermore, Telecom operators are quickly gaining
market share from cable TV and satellite TV service providers by
offering fiber-based TV and other high-speed broadband services to
subscribers thus posing a threat to DISH Network.
We maintain our long-term Neutral
recommendation on Dish Network Corp. Currently, the company
retains a short-term Zacks #3 Rank (Hold) on the stock.
DISH NETWORK CP (DISH): Free Stock Analysis Report
DIRECTV (DTV): Free Stock Analysis Report
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