Dish Earnings: This Will Capture Investors’ Attention

Dish Network (DISH) is set to report its third-quarter earnings results tomorrow. In the second quarter, its performance was mixed. Whereas its revenue fell just 7.2% YoY (year-over-year) to $3.21 billion and beat analysts’ forecast of $3.14 billion, its EPS fell YoY to $0.60 from $0.83 and missed analysts’ $0.65 estimate.

In the third quarter, analysts expect Dish to report EPS of $0.60 and revenue of $3.16 billion. To compare, Dish’s EPS of $0.82 in last year’s third quarter easily beat analysts’ estimate of $0.67, while its revenue of $3.40 billion fell short of their forecast. Here are three things investors will be paying attention to tomorrow.

Updates on Dish’s wireless venture in earnings release

Dish, seeking to diversify its revenue, has long wanted to be a wireless phone service provider. In July, Dish announced a deal to purchase wireless assets divested by T-Mobile (TMUS) and Sprint (S), which could help jumpstart Dish’s wireless business. T-Mobile and Sprint agreed to divest certain wireless assets to secure regulatory approval for their merger. They have already won the approval of federal regulators, but more than a dozen states have maintained opposition.

Dish will require $5.0 billion to purchase the T-Mobile and Sprint assets, and around $10 billion to set up its own wireless infrastructure. Therefore, Dish needs to raise about $15 billion for its wireless venture.

When Dish reports its third-quarter earnings, investors will be listening to what Dish thinks about the T-Mobile-Sprint merger’s opposition, and how Dish plans to raise funding for its wireless venture. Dish finished the second quarter with just $1.9 billion in cash.

Dish’s pay-TV business

Dish has been losing pay-TV customers amid cord-cutting. As a result, it has been rejecting attempts by its content providers to hike programming fees. These rejections have resulted in disputes between Dish and its content partners, as well as months-long channel blackouts.

When Dish reports its earnings tomorrow, investors will be checking if Dish’s hard negotiation tactics with content providers are helping to control costs. Soaring costs deteriorated Dish’s profit in the second quarter.

Sling TV faces more competition

Sling TV, which has been essential in offsetting Dish’s traditional pay-TV customer losses, is about to face more competition. Walt Disney (DIS), Comcast (CMCSA), and AT&T are preparing to launch video services that will compete with Sling TV for subscribers.

When Dish reports its earnings, investors will be looking at how Sling TV performed in the third quarter. They will also be listening to Dish’s views on its video streaming competition.