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Can DISH Beat Earnings Estimates in 4Q17?

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EPS estimate for 2017 and 4Q17 

DISH Network (DISH) is set to release its 4Q17 financial results before the market opens on February 20, 2018. According to Yahoo Finance (VZ), its 4Q17 EPS (earnings per share) are expected to fall 21.4% YoY (year-over-year) to $0.55. Softness in subscriber-related revenue may hurt the company’s bottom line in the quarter.

Analysts also believe DISH will complete 2017 with EPS of nearly $2.03 compared to $3.05 in 2016.

In the graph above, we can see the company’s EPS movements over the last four years.

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Catalysts and headwinds for EPS growth

According to a Yahoo estimate, DISH’s 4Q17 revenue is expected to fall 5.2% to $3.5 billion on an annualized basis due to a 4.8% YoY fall in subscriber-related revenue.

The company’s programming expenses, which make up the bulk of its subscriber-related expenses, continue to grow due to the higher contract rates being charged by network operators. In 3Q17, the company’s subscriber-related expenses rose 0.4% YoY.

Rising carriage fees may not only lead to contracting margins but also hurt bottom-line growth if the company fails to pass on the increased rates to its subscribers due to stiff competition in the pay-TV market.

Moreover, the company may also incur reactivation costs related to the stoppage of services in hurricane-affected Puerto Rico and the US Virgin Islands.

According to Yahoo, EPS estimates for media companies Time Warner (TWX), the Walt Disney Company (DIS), and Viacom (VIAB) for the upcoming quarter stand at $1.45, $1.61, and $0.96, respectively.

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