Subscriber Losses Will Continue To Be A Drag on Dish Network’s Revenues In 2019
Dish Network (NASDAQ: DISH) recently reported its fourth quarter results, with revenue coming in ahead of market expectations while its earnings per share missed. In Q4, the company’s revenues declined 5% year-over-year to $3.3 billion, largely due to a fall in its total pay-TV subscriber base to about 12.3 million compared to the prior year’s 13.2 million. The company ended 2018 with 9.9 million DISH TV subscribers (down 1.1 million y-o-y) and 2.4 million Sling TV subscribers(+205,000 y-o-y). While the entire Pay TV domain is grappling with cord cutting and other secular pressure, 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. Furthermore, Sling saw higher average revenue per user (ARPU) for the quarter, 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 $0.64 compared to $2.64 in Q4 last year, which was positively impacted by an income tax benefit of approximately $1.2 billion due to an adjustment to deferred tax assets and liabilities related to tax reform legislation.
Dish Network’s stock price declined by around 50% 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 $44, which is now around 30% ahead of the current market price. We have created an interactive dashboard on How Dish Network Fared in 2018, which outlines our forecasts for the company’s Q1 and full-year fiscal 2019 results. You can modify our forecasts to see the impact any changes would have on the company’s earnings. In addition, you can see all Trefis Media company data here.
Q1 Trends
- With Echostar Merger Approaching, What To Expect From Dish’s Q3 Results?
- Can Dish Network Stock Return To Its Pre-Inflation Shock Highs?
- Dish Stock Has Big Upside Potential To Its Pre-Inflation Peak
- How Will The Cyber Attack Impact Dish’s Q1 Results?
- Is Dish Network Stock A Buy Despite Many Headwinds?
- Will Dish Network Stock Continue To Underperform?
We expect Dish Network to continue to see subscriber losses for Q1, which – coupled with pressure on 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 and competitive pressure. Overall, we expect the company to report a 5% decline in revenues for Q1 to around $3.3 billion.
Fiscal 2019 Outlook
We expect Dish Network to generate over $13.3 billion in revenues for full-year 2019, and earnings of about $1.3 billion. Our revenue forecast of about $13.3 billion represents a modest year-on-year decline. Of the total expected revenues in 2019, we estimate $13.1 billion from the subscription-related business and over $180 million from equipment sales. In 2018, Dish Network lost approximately 920,000 net Pay-TV subscribers compared to a loss of approximately 284,000 net subscribers during the same period in 2017. We forecast the company’s total subscribers to continue to decline to around 12.0 million, with an average monthly fee per subscriber of around $91, translating into $13.1 billion in subscription-related revenues in 2019.
What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs
For CFOs and Finance Teams | Product, R&D, and Marketing Teams
Like our charts? Explore example interactive dashboards and create your own.