Earnings Cheat Sheet: Dish Networks Beats Earnings, But Trading Mixed

Dish Networks (DISH) blew past earnings estimates today but trading was mixed early on with news of a net subscriber loss of 29,000 subscribers.

Last quarter, Dish reported $0.57 earnings per share compared to $0.14 per share for the prior-year quarter and a 9.3 percent increase in revenue to $3.17 B. At that time, the company claimed a subscriber base of 14.3 million satellite TV customers.

The stock got pummeled following last-quarter’s report, sank like a stone, and bottomed in early August at around $17 a share. The stock recovered, riding the wave of the broader market higher and currently trades close to $21 a share, the high last quarter before the stock took a nose dive.

Earnings: @ $245B, up 35 percent (yoy) from the year-ago period.

Revenues: @ $3.2B, up 11 percent yoy.

Actual vs. Expected: Quarterly eps @ $0.55 per share (diluted), beating consensus estimates of $0.42 per share, and compared to $0.18 eps for the year-ago period.

Notable Stats: From the 10-Q:

1) “We have substantial debt outstanding and may incur additional debt.”

A true statement, indeed, as it looks like the company’s $10.7B in debt exceeds its assets plus shareholders equity.

2) ” Our programming signals are subject to theft, and we are vulnerable to other forms of fraud that could require us to make significant expenditures to remedy.”

As proof of that statement, satellite and transmission expenses for Echostar grew 36 percent over the year- ago quarter.

Key Quotes: From the 10-Q:

“Our gross activations, net subscriber additions and churn were negatively impacted during the third quarter 2010 compared to the same period in 2009 as a result of increased competitive pressures, including the aggressive marketing and the effectiveness of certain competitors’ promotional offers, which included an increased level of discounts… Going forward, our margins may face further pressure if we are unable to renew our long-term programming contracts on favorable pricing and other economic terms.”

Competitors: Echostar Corp (NASDAQ: SATS).

Technicals: The stock pattern following last quarter’s report shows higher volatility than its beta of 1.5 would indicate, suggesting DISH could be shaping up for another decline. Plus, the company fundamentals and associated risks suggest more price-squeezing longer term, despite a beat on earnings this quarter.  Although MACD is signaling a buying opportunity and the stock has trended higher recently, stochastic shows an overbought condition indicating the current price is unlikely to be sustained.

DISH Network Corp (NASDAQ: DISH)

Disclosure: No positions