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Dish Network Corp. (DISH) Q4 EPS Preview: Scrambled Performance

 February 19, 2013 03:39 PM
 


(By Rich Bieglmeier) Dish Network Corp. (DISH) will host a conference call at noon ET on Wednesday, Feb. 20, 2013 to discuss its fourth quarter and year-end 2012 financial results. DISH will distribute a financial results press release prior to the call. Wall Street anticipates that DISH will earn $0.51 for the quarter. iStock expects the  satellite TV company to report earnings that will match Wall Street's consensus number. The iEstimate is $0.51, too.

DISH provides direct broadcast satellite-subscription television services in the United States. It offers programming, including approximately 230 basic video channels, 60 Sirius satellite radio music channels, 30 premium movie channels, 35 regional and specialty sports channels, 3,200 local channels, 275 Latino and international channels, and 70 channels of pay-per-view content for millions of customers worldwide.

[Related -Warren Buffett's Latest Stock Picks And His Biggest Portfolio Holdings]

Ten of DISH's last 16 quarterly checkups delivered bullish surprises, including three of the last four. The average upside report stands at 15% more than analysts targeted with a max beat of 34.15% and min bypass of 5.66%. Unfortunately, half of the plus surprises were accompanied by losses for DISH holders in the days surrounding earnings. Shares dipped an average of 4% for the five beat and drops while gaining 5.7% on the beat and pops; however, take out a 19% move and the average falls to 2.33%.

[Related -DISH Network Corp (DISH): How DISH Could Monetize Spectrum Assets?]

Earnings traders might be better off if the company misses; at least that's what history shows. The stock actually made gains of 18.60%, 6.40%, 1.90%, and 1.60% in the days around for of the six disappointing results. Can you believe that? Now the bad news, the stock price tanked on the other pair of missed, sliding -13.50% and -19.60% - ouch, that needs more than a Band-Aid.

It's been our experience this earnings season that Google Trends points us in the right direction for companies like DISH; especially as these content providers allow users to view shows on multiple devices and on-demand.

Search queries for the keyword "Dish TV" are up 23.4% compared to Q4 for 2011. At the same time, quarter-over-quarter (QoQ) Googles are flat compared to Q3 2012. Last year, DISH earned 70 cents for the fourth quarter; however, they lost 35 cents in the third quarter of 2012. Compared to last year, there is plenty of room for an upside surprise according to Google Trends.

One of our favorite keywords for subscription services is the company name and login. In this case "Dish login". If the stats are accurate from trends, then it was a good quarter for new subscribers as search intensity is up 78% on average year-over-year (YoY) and 21.3% QoQ.

But, new subscribers can be X-ed out by cancellations  With that in mind, let's see how "Dish cancel" looks. Queries increased by 25.6% (YoY); bad on the surface, but in-line with Dish TV queries and well below login. Things look much better versus Q3 2012 as cancel searched dropped 28.9%.

Overall: iStock thinks Dish Network Corp. (DISH) is more likely to beat the street than miss the consensus mark. Google Trends suggest a good quarter where subscriber acquisition outpaced cancellations.

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