The Zacks Analyst Blog Highlights: DISH Network, Sunoco Logistics Partners, Royal Dutch Shell, Energy Transfer Partners and Regency Energy Partners
CHICAGO, May 8, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include DISH Network Corporation. (Nasdaq:DISH), Sunoco Logistics Partners LP (NYSE:SXL), Royal Dutch Shell plc (NYSE:RDS.A), Energy Transfer Partners LP (NYSE:ETP) and Regency Energy Partners LP (NYSE:RGP).
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Here are highlights from Tuesday's Analyst Blog:
DISH Likely to Top Estimates
We expect DISH Network Corporation. (Nasdaq:DISH), the second-largest satellite TV operator in the U.S., to beat expectations when it reports its first-quarter 2013 results before the market opens on May 9, 2013.
Why a Likely Positive Surprise?
Our proven model shows that DISH is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.89%. This is a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank #3 (Hold): DISH currently has a Zacks Rank #3. Note that the stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) and 3 (Hold) have a significantly higher chance of beating the earnings.
The combination of DISH's Zacks Rank #3 (Hold) and +1.89% ESP makes us confident of a positive earnings beat on May 9, 2013.
What is Driving the Better-Than-Expected Earnings?
We expect DISh to benefit from the launch of its nationwide satellite-based broadband service called "dishNET, which covers around 2 million people with a starting speed of 5 Mbps. Moreover, DISH has renewed its agreement with Frontier Communications, ViaSat and Charter Communications to provide broadband satellite service to its huge customer base in rural areas to download movies at a rapid speed. We believe that these initiatives will boost the company's revenues apart from improving its churn rate.
The company's policy of not raising its prices unlike its competitors will also help it to reduce its churn rate and ramp up customer growth in the future. However, DISH is facing fierce competition from telecom carriers, who are gaining market share from satellite TV operators by offering fiber-based TV and other high-speed broadband services to subscribers. Rising programming expenses also remain a near-term headwind for the company and could impact the company's bottom line in the coming quarter.
Sunoco, Royal Dutch Unit Ink Deal
Energy pipelines and terminals operator, Sunoco Logistics Partners LP (NYSE:SXL) has inked a long-term deal with Shell Trading US Company (STUSCO), an affiliate of European energy major Royal Dutch Shell plc (NYSE:RDS.A). Per the deal, STUSCO will become an anchor customer of the Mariner South project of Sunoco.
Management reveals that in order to build high-standard export and import facilities of liquefied petroleum gases (LPG) in the Gulf Coast of U.S., the Mariner project will unite Mont Belvieu-based storage and fractionation terminals of Lone Star NGL LLC with the pipeline facilities of Sunoco, that run from Mont Belvieu, Texas to Nederland, Texas. Lone Star is a joint venture between natural gas pipeline operator, Energy Transfer Partners LP (NYSE: ETP) and natural gas service provider, Regency Energy Partners LP (NYSE:RGP).
The Mariner South project is expected to have a capacity to transport 6 million barrels of LPG per month initially. The project is expected to be online by the first quarter of 2015.
Philadelphia-based Sunoco, a master limited partnership (MLP), acquires, owns, and operates a geographically diverse portfolio of refined products and crude oil pipelines and terminal facilities. Sunoco Logistics is organized into four segments – Refined Products Pipeline System, Terminal Facilities, Crude Oil Pipeline System, and Crude Oil Acquisition and Marketing.
Sunoco currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
With low-risk and stable cash flow-generating energy infrastructure assets, Sunoco offers investors an opportunity to capture income growth through steadily-rising cash distributions and capital appreciation.
However, unfavorable regulatory changes by the Federal Energy Regulatory Commission (FERC) would impact the partnership's results.
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