Following the first quarter earnings announcement on May 3, a
mixed sentiment was palpable among the analysts covering
DISH Network Corp.
) with regard to estimate revision. We believe that the mixed
sentiment stems from stiff competition that exists in the satellite
and cable market.
First Quarter Highlights
Quarterly GAAP net income was $360.31 million or 80 cents per
share compared with $549.4 million or $1.22 per share in the
year-ago quarter. First-quarter 2012 EPS of 80 cents was ahead of
the Zacks Consensus Estimate of 70 cents.
Quarterly total revenue increased 11.1% to $3.58 billion from
$3.2 billion in the year-ago quarter. This was mainly due to an
increase in subscriber related revenue and contribution from
Blockbuster. However, first quarter revenue fell below the Zacks
Consensus Estimate of $3.63 billion.
Agreements of Analysts
Out of the 15 analysts covering the stock in the last 7 days,
four analysts raised the estimate for the second quarter of 2012,
but six analysts reduced. For the third quarter of 2012, out of the
14 analysts, four analysts raised the EPS estimate but four
analysts slashed estimates over the last 7 days.
For fiscal 2012, out of the 14 analysts, 10 analysts increased
the estimates while only one reduced the same. However, for 2013,
two analysts revised the estimate upward while nine moved in the
Currently, the Zacks Consensus EPS Estimate for the second
quarter of 2012 is pegged at 72 cents. The projected annual decline
rate is 3.56%. Similarly, for the third quarter, the current Zacks
Consensus EPS Estimate of 66 cents reflects a year-over-year
decrease of 7.04%.
Magnitude of Estimate Revisions
Over the last 7 days, the Zacks Consensus Estimate for the
second quarter of 2012 dropped by 3 cents from the earlier estimate
of 75 cents. However, for the third quarter of fiscal 2012, the
Zacks Consensus Estimate was just a penny above the earlier
estimate of 65 cents.
For fiscal 2012, the estimate was 5 cents above the previous
estimate of $2.75 in the last 7 days, while in fiscal 2013, the
current estimate was 7 cents below the prior estimate of $2.94.
In the last quarter, DISH Network produced an earnings surprise
of 10 cents or 14.29%.
The current Zacks Consensus Estimates for the second and third
quarters of 2012 reflect 0.00% earning surprise (indicating that
the company should report in line with estimates in both
However, fiscal 2012 and 2013 reflect downside potential of
0.36% and 0.70%, respectively.
Huge subscriber gain, continuous product launch and strong
balance sheet will act as strong catalysts for growth for the
However, increasing content cost and stiff competition from
other cable and satellite TV's like
Time Warner Cable
) as well as from other online network companies will act as strong
headwinds for the company going forward. We, therefore, maintain
our long-term Neutral recommendation on Dish Network.
Currently, Dish Network has a Zacks #3 Rank, implying a
short-term Hold rating on the stock.
About Earnings Estimate Scorecard
As a PhD from MIT, Len Zacks proved over 30 years ago that
earnings estimate revisions are the most powerful force impacting
stock prices. He turned this ground breaking discovery into two
of the most celebrating stock rating systems in use today. The
Zacks Rank for stock trading in a 1 to 3 month time horizon and
the Zacks Recommendation for long-term investing (6+ months).
These "Earnings Estimate Scorecard" articles help analyze the
important aspects of estimate revisions for each stock after
their quarterly earnings announcements. Learn more about earnings
estimates and our proven stock ratings at:
DISH NETWORK CP (DISH): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
TIME WARNER CAB (TWC): Free Stock Analysis
To read this article on Zacks.com click here.