Should You Use DISH Network's (NASDAQ:DISH) Statutory Earnings To Analyse It? - Simply Wall St

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As a general rule, we think profitable companies are less risky than companies that lose money. Having said that, sometimes statutory profit levels are not a good guide to ongoing profitability, because some short term one-off factor has impacted profit levels. Today we'll focus on whether this year's statutory profits are a good guide to understanding DISH Network (NASDAQ:DISH).

It's good to see that over the last twelve months DISH Network made a profit of US$1.42b on revenue of US$14.2b. The chart below shows how profit has actually increased over the last three years, even while revenue has declined.

Check out our latest analysis for DISH Network

NasdaqGS:DISH Earnings and Revenue History January 13th 2021

Of course, it is only sensible to look beyond the statutory profits and question how well those numbers represent the sustainable earnings power of the business. This article will focus on the impact unusual items have had on DISH Network's statutory earnings. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

How Do Unusual Items Influence Profit?

Importantly, our data indicates that DISH Network's profit was reduced by US$357m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect DISH Network to produce a higher profit next year, all else being equal.

Our Take On DISH Network's Profit Performance

Unusual items (expenses) detracted from DISH Network's earnings over the last year, but we might see an improvement next year. Because of this, we think DISH Network's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share have grown at 18% per year over the last three years. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 2 warning signs for DISH Network you should be mindful of and 1 of them is significant.

This note has only looked at a single factor that sheds light on the nature of DISH Network's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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Should You Use DISH Network's (NASDAQ:DISH) Statutory Earnings To Analyse It? - Simply Wall St
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