What To Expect From Dish Network’s Q3 Results
Dish Network (NASDAQ: DISH) is scheduled to announce its fiscal third quarter results on Wednesday, November 7. In Q2, the company’s revenues declined 5% year-over-year to $3.46 billion, largely due to a fall in its pay-TV subscriber base to about 13 million compared to the prior year’s 13.33 million. While the entire Pay TV domain is suffering, the impact on Dish has been significant, as evidenced by the fact that it has been unable to sustain its subscriber base despite a positive contribution from Sling TV. In Q2, Sling TV’s subscriber base grew nearly 30% y-o-y. Furthermore, Sling saw higher average revenue per user (ARPU), driven by a mix of customers taking higher-priced packages and add-on revenue such as cloud DVR. Dish Network also reported diluted net earnings per share of $0.83 compared to $0.09 in Q2 last year.
Dish Network’s stock price has declined more than 35% over the course of 2018, due to the continued subscriber losses – driven by cord cutting and the increasing popularity of over-the-top (OTT) streaming services from companies such as Netflix (NASDAQ: NFLX), Amazon (NASDAQ: AMZN) and Hulu. However, we have maintained our long-term price estimate for the company at $40, which is now around 30% ahead of the current market price. We have created an interactive dashboard on Can Dish Network Keep Beating Estimates In The Second Half of Fiscal 2018? which outlines our forecasts for the company’s Q3 and full-year fiscal 2018 results. You can modify our forecasts to see the impact any changes would have on the company’s earnings and valuation.
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We expect Dish Network to continue to see subscriber losses for Q3 which, coupled with pressure on average revenue per user (ARPU), will negatively impact revenues in the quarter. However, the company continues to offer “skinny bundles” to lure customers back to its Pay TV services through Sling TV, which could offset some of the secular pressure. To add to that, a $5 price increase in Sling’s Orange package announced in June will be reflected in the company’s top line starting with the third quarter. Overall, we expect the company to report a 4% decline in revenues to around $3.4 billion.
Fiscal 2018 Outlook
We expect Dish Network to generate over $14 billion in revenues for full-year 2018, and earnings of about $1.8 billion. Our revenue forecast of about $14.1 billion represents a modest year-on-year decline. We forecast the company’s total subscribers to continue to decline to around 12.9 million, with an average monthly fee per subscriber of around $91, translating into $14 billion in subscription-related revenues in 2018.
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