Dish Q1 Earnings: ARPU Growth Compensates For Pay-TV Subscriber Decline

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Dish Network (NASDAQ:DISH) reported strong Q1 2016 earnings Wednesday, with overall revenues growing 2% year-over-year (y-o-y) to $3.79 billion and diluted earnings per share rising about 10.5% y-o-y to $0.84. [1] Dish’s pay-TV subscriber base continued to shrink, but growth in ARPU was the main reason for pay-TV revenue growth. On the earnings call, Dish’s management stated that they could potentially participate as a bidder in the FCC’s upcoming incentive auction. [2] However, they declined to elaborate on their bidding intentions and strategy due to the FCC’s anti-collusion rules. The management also stated that the company’s options are still open in terms of how they want to use their current spectrum holdings.

Our price estimate for Dish stands at $63, implying a premium of more than 30% to the market.

The following table provides an overview of the company’s earnings.

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DISH Earnings Q1 2016

 

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Dish Network
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Notes:
  1. DISH Network Reports First Quarter 2016 Financial Results, April 20, 2016, Dish Network Press Release []
  2. DISH Network’s (DISH) CEO Charlie Ergen on Q1 2016 Results – Earnings Call Transcript, April 20, 2016, Seeking Alpha []