DISH Network (DISH) Beats On Q2 Earnings, Lags Revenues

DISH Network Corp. (NASDAQ:DISH) declared mixed financial results in the second quarter of 2016. While the bottom line surpassed the Zacks Consensus Estimate, the top line lagged the same.

Quarterly net income came in at $410.5 million or 88 cents per share compared with $324.4 million or 70 cents in the year-ago quarter. Earnings per share of 88 cents steered past the Zacks Consensus Estimate of 74 cents.

Total revenue in the reported quarter was approximately $3,837 million, up 0.1% year over year but short of the Zacks Consensus Estimate of $3,851 million.

Segment-wise, subscriber-related revenues grossed $3,826.2 million in the second quarter, up 0.7% from the prior-year quarter. Equipment sales & other revenues totalled $10.8 million, down 65.1% from the prior-year quarter.

Second-quarter 2016 operating expenses were $3,223.2 million, up 2.28% year over year. Operating profit was $613.8 million compared with $534 million in the year-ago quarter. EBITDA at the end of the second quarter was $899.5 million versus $924.4 million in the year-ago quarter.

As of Jun 30, 2016, DISH Network had approximately 13.593 million pay-TV subscribers compared with 13.932 million at the end of the second quarter of 2015. The company lost 281,000 pay-TV subscribers in the reported quarter compared with a loss of 81,000 in the year-ago quarter.

Further, the company lost 15,000 broadband subscribers in the reported quarter versus a gain of 4,000 in the same quarter last year. At the end of the quarter under review, DISH had 613,000 broadband subscribers in comparison with 595,000 at the end of the prior-year quarter.

The Pay-TV average monthly subscriber churn rate in the second quarter was 1.96% compared with 1.71% in the prior-year quarter. Pay-TV ARPU (average revenue per user) was $89.98 compared with $87.91 in the prior-year quarter. Pay-TV average subscriber acquisition cost was $782 against $767 in the year-ago quarter.

In the first half of 2016, DISH Network generated $1,533.1 million of cash from operations compared with $1,449.2 million in the prior-year period. Free cash flow in the reported period was $1,199.5 million, up from $1,039.3 million in the year-ago period.

At the end of the second quarter of 2016, DISH had $3,487.3 million of cash and marketable securities and $14,201.6 million of outstanding debt on its balance sheet compared with $1,611.1 million and $13,755.9 million, respectively, at the end of 2015.

Zacks Rank & Stock to Consider

Currently, DISH carries a Zacks Rank #3 (Hold). Some better-ranked stocks in this sector include AT&T Inc. (NYSE:T) , Frontier Communications Corp. (NYSE:T) and Liberty Broadband Corp. (NASDAQ:LBRDK) . All three stocks currently hold a Zacks Rank #2 (Buy).