Dish Network (NASDAQ:DISH) has a lot to cover this earnings season given the spate of acquisitions and significant moves the company has made recently. Of these we look at the impact of the price hikes and its Blockbuster deal. We also look for more color regarding plans for its acquired spectrum. The company reports next week on Aug. 9th, a few days after its rival DirecTV (NASDAQ:DTV) releases its results. We take a look at some of the key items to watch below.
Our price estimate for Dish Network stands at $31.50, which is around 10% ahead of the market.
Impact of Price Hikes & Blockbuster Deal
Dish network raised prices earlier this year and last quarter did not reflect the impact properly. However, Q2 will give a much better picture of degree of adoption of new pricing plans. Although the company mentioned that the implementation of new prices started off rather smoothly, we think that there is a possibility that this move would have led to a higher subscriber churn in Q2 and consequently lackluster net subscriber additions, especially because Dish has struggled with other problems such as channel blackouts in recent past. There is uncertainty around the pay-TV market share growth for the company, something that we believe, will be better clarified with these results.
Additionally, Dish has been promoting Blockbuster and been marketing it in the hopes of luring new subscribers or making existing ones “stickier” — or less likely to leave.
More Light on Spectrum Acquisition
Dish has been acquiring distressed companies to gain access to spectrum, which we believe, the company could use for expansion into mobile broadband in order to hedge itself against the shifting consumer preferences and increasing competition from bundled services. (see Dish’s AT&T Complaint Tips Hand on Streaming Plan) We expect Dish to give more color on its strategy and perhaps a rough time-line of implementation.
