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Static-free Quarters for Comcast & DIRECTV Blur DISH Network's Results

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DISH Network (NASDAQ: DISH) reported earnings this morning that underwhelmed in terms of less-than-expected revenue and EBITDA missing expectations. Weaker numbers answer why the satellite provider started the day off trading down almost 3%, however, the company did have some commendable news to report.

Slowly but surely, DISH is becoming a turnaround story with more subscribers than expected, according to Reuters. While names like Comcast (NASDAQ: CMCSA) and DIRECTV (NYSE: DTV) come to mind when discussing promising and prosperous pay-television providers, DISH is not to be discounted from the competition yet. The company reported an impressive sub quarter this morning, with video net adds coming in at 104k and consensus of +62k outperformed the industry's outlook.

Also profitable for DISH this quarter was, surprisingly enough, Blockbuster. Hundreds of stores were closed throughout the quarter, with many more gearing up to shut down as the company has finally come to the realization that Netflix (NASDAQ: NFLX) and Redbox DVD's are much more practical in today's society than late fees and driving to the store late at night.

"Blockbuster generated 1Q12 revenue of $334mn in revenue vs. our $299mn estimate along with operating income of $14mn (vs 1Q12E B/E). DISH indicated that it was operating more than 1500 stores in 2011 but that it expects to close ~500 stores in 1H12," Bank of America said this morning when discussing DISH's earnings.

Clearly, all the encouraging news did not dissipate the fuzz across the network's quarter, as EBITDA of $781M was down year-over-year and well below estimates. Even though the quarterly results seemed varied in strength or weakness, the positives were not enough to place DISH Network ahead of the competition in the view of analysts.

"DISH trades at 4.8x 2012E OCF, just slightly below DTV at 5.1x. While DirecTV (DTV : NASDAQ : $48.22 | BUY) operations are superior, DISH has amassed a portfolio of Spectrum assets which we value at $4B. With this spectrum, DISH is considering rolling out a mobile Triple Play service," Canaccord Genuity said in a recent report.

DIRECTV is not the only company garnering rave reviews in the face of DISH Network. Comcast has once again made believers out of customers and investors alike, as the entertainment provider enjoyed a quarter that its opponents could only dream of with Bank of America and Oppenheimer both reiterating that Comcast remains a top pick for the firms.

Analysts at Oppenheimer praised the consistent communications giant, as cable trends continue to look solid for the rest of the year and ARPU growth was strong across all products. Evidently, there is no stopping Comcast, as customer volumes are robust as well.

In order to catch up to the likes of CMCSA and DTV, it seems that DISH must make moves to aid maturation in the video market and make numerous rebranding efforts to catch up with its current stock price. With Blockbuster stores continuing to close and some decent numbers to report throughout the quarter, DISH Network should gain steady revival momentum as the year goes on.

DISH is currently trading at $30.89, down 0.83% today, while DTV is trading at $48.38, up 0.2% for the day. Comparatively, CMCSA is up 0.76% today and trading at $29.67.

Latest Ratings for DISH

DateFirmActionFromTo
Sep 2014Canaccord GenuityInitiates Coverage onHold
Aug 2014WunderlichMaintainsHold
Jun 2014CitigroupUpgradesNeutralBuy

View More Analyst Ratings for DISH
View the Latest Analyst Ratings

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