On Jun 27, 2014, we issued an updated research report on DISH Network Corp. (DISH). A strong portfolio of wireless spectrum, innovative product launches and the recent agreement with Hearst TV are likely to spur growth for the company going forward.
Except for the last quarter, DISH Network delivered positive earnings surprises in the remaining quarters last year, with an average beat of 30.35%. The company declared mixed financial results for the first quarter of 2014. The bottom line missed the Zacks Consensus Estimate while the top line outpaced the same.
Recently, DISH Network announced its plans to launch Internet TV service. If successful in the endeavor, DISH will be the first Internet TV provider in the U.S. Moreover, the company signed an online pay-TV deal with leading media mogul, The Walt Disney Company (DIS). The agreement will allow DISH Network’s customers to watch live shows on devices like PCs, smartphones and tablets, thereby bypassing the need for a set-top box.
Recently, DISH Network achieved a significant milestone by commercially launching the first wireless set-top box in the pay-TV industry. Launch of such value-added services positively impact certain important operating metrics.
DISH Network has decided to bid for the broadcasting rights of the National Football League’s (:NFL) Sunday matches if the company’s closest rival DIRECTV fails to renew its existing rights. DIRECTV, the largest satellite TV operator in the U.S., holds the exclusive right to telecast “NFL Sunday Ticket” since 1994.
Meanwhile, in May 2014, DIRECTV reached a definitive agreement with leading carrier AT&T Inc. (T), to sell its business to the latter for $48.5 billion. If sanctioned, the deal will hurt DISH Network’s subscriber growth as the company lacks in the voice service front. Moreover, the ongoing merger between the largest and the second largest cable TV operator in the U.S. – Comcast Corp. (CMCSA) and Time Warner Cable – will further impact DISH Network’s market share as the merged entity will offer services at competitive rates, thus affecting DISH Network’s revenue and subscriber growth.
Moreover, rising programming costs and mounting debt may further act as headwinds for the company moving forward.
DISH currently has a Zacks Rank #3 (Hold).
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