DISH Network Corp. (DISH - Free Report) – the second largest satellite TV operator in the U.S. – is slated to report fourth-quarter 2016 financial numbers before the opening bell on Feb 22.

Over the past three months, shares of DISH Network marked a growth of 11.96% compared with the Zacks categorized Cable TV industry’s growth of 13.29%.

Last quarter, DISH Network posted a negative earnings surprise of 7.25%. However, the company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 114.39%.

Let’s see how things are shaping up for this announcement.

Factors at Play

DISH Network’s top-line growth may remain under pressure as its failure to strike any deal with wireless operators to deploy a nationwide wireless network has been a major headwind. Persistent loss of subscribers remains a potent headwind for DISH Network. Also, the company may be affected by its failure to renew long-term programming contracts on favorable pricing and other economic terms. Also, escalating programming and content expenses as well as retransmission fees may also hurt the company’s margins.

We are, however, impressed by DISH Network’s efforts to diversify its business model from being a pure-play satellite-TV operator to an Internet TV operator should help the company counter competitive threat from low-cost video streaming operators. The company is poised to benefit from its Internet TV service – Sling TV – which offers services at a reasonable rate. The flexible cash and liquidity position of the company further opens up scope for investments.

We also appreciate DISH Network’s plans to boost subscriber addition for its Sling TV service this holiday season. The pay-TV giant has partnered with Wal-Mart Stores Inc. (WMT - Free Report) , Best Buy Co., Inc. (BBY - Free Report) and GameStop Corp. (GME) to promote the sale of its Sling TV gift cards.

Earnings Whispers

Our proven model does not conclusively show that DISH Networkis likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zacks ESP: DISH Network has an Earnings ESP of -4.55%. This is because the Most Accurate estimate stands at 63 cents while the Zacks Consensus Estimate is pegged higher at 66 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: DISH Network has a Zacks Rank #4 (Sell). Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

DISH Network Corporation Price and EPS Surprise

DISH Network Corporation Price and EPS Surprise | DISH Network Corporation Quote

Key Pick

Here is a company in the Zacks-categorized broader ‘Consumer Discreationary’ sector that has the right combination of elements to post an earnings beat this quarter.

Cinemark Holdings Inc. (CNK - Free Report) is expected to release fourth-quarter 2016 results on Feb 23, 2017. The company has an Earnings ESP of +2.38% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 4.29%.