Yahoo Finance Altice (ATUS) Incurs Q1 Loss on Lower Revenues, Higher Costs
Altice USA, Inc. ATUS reported soft first-quarter 2024 results, with the top line surpassing the Zacks Consensus Estimate but the bottom line missing the same. The company reported a revenue decline year over year, owing to soft demand trends in the Residential, News and Advertising segments. However, growth in mobile line and fiber customer net additions, focus on network upgrades, improving customer care, AI integration and financial discipline were positives.
Bottom Line
Altice reported a net loss of $21.2 million or a loss of 5 cents per share against a net income of $25.9 million or 6 cents per share in the prior-year quarter. The sharp year-over-year decline was due to top-line contraction and higher interest expenses. The bottom line missed the Zacks Consensus Estimate by 6 cents.
Altice USA, Inc. Price, Consensus and EPS Surprise
Altice USA, Inc. price-consensus-eps-surprise-chart | Altice USA, Inc. Quote
Revenues
Total revenues in the quarter were $2.25 billion, down from $2.29 billion in the prior-year quarter. Lower net sales from broadband and video customers impeded the top line. However, revenues beat the consensus estimate by $17 million.
The company made progress in its growth strategies by accelerating network enhancement and customer experience. At the quarter-end, Altice had 2,780 million FTTH (Fiber to the home) passings, about 44,800 of which were added in the January-March period.
Fiber net additions were about 53,000 in the quarter, led by increased migration of existing customers and higher fiber gross additions. Total fiber customers reached 395,000 by the end of the quarter. Residential average revenue per user (ARPU) improved marginally to $135.67 from $135.32 a year ago. Despite losses of video subscribers, greater mobile penetration, lower churn rate and AI implementation across care and retention centers supported the ARPU.
Business services and wholesale revenues increased to $364.9 million from $363.6 million in the year-ago quarter. The improvement was driven by growth in Lightpath revenues. Net sales surpassed our estimate of $341.3 million.
News and Advertising revenues were $105.7 million, up from 98.7 million in the year-earlier quarter, owing to higher political advertising revenues. Net sales beat our estimate of $98.8 million.
Residential revenues (which include Broadband, Video, Telephony and Mobile) were $1.77 billion, down from $1.82 billion in the year-earlier quarter, primarily due to the loss of higher ARPU video customers. Net sales missed our estimate of $1.78 billion.
Other Quarterly Details
Operating income decreased to $393.1 million from $425.1 million in the year-ago quarter owing to high interest expenses of $437.1 million compared with $389.3 million a year ago. Adjusted EBITDA was $846.6 million compared with $868.4 million in the prior-year quarter. Optimum Mobile witnessed healthy subscriber growth during the quarter, reaching 351,600 customers, representing a 14.2% penetration of the company’s total broadband customer base.
Altice’s total passings grew more than 51,000 and reached 9.7 million at the end of the quarter. The company is witnessing solid customer penetration, typically reaching approximately 40% within a year of rollout in new-build areas.
Cash Flow & Liquidity
In the quarter, Altice generated $399.7 million of cash from operating activities compared with $416.8 million a year ago. As of Mar 31, 2024, the company’s net debt was $24.83 billion.
Zacks Rank
Altice currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Cogent Communications Holdings, Inc. CCOI is scheduled to release first-quarter 2024 earnings on May 9. The Zacks Consensus Estimate for earnings is pegged at a loss of 80 cents per share, suggesting a decline of 715.4% from the year-ago reported figure.
Akamai Technologies, Inc. AKAM is slated to release first-quarter 2024 earnings on May 9. The Zacks Consensus Estimate for earnings is pegged at $1.61 per share, indicating growth of 15% from the year-ago reported figure.
Akamai has a long-term earnings growth expectation of 7.3%. AKAM delivered an average earnings surprise of 6.5% in the last four reported quarters.
Keysight Technologies, Inc. KEYS is set to release second-quarter fiscal 2024 earnings on May 20. The Zacks Consensus Estimate for earnings is pegged at $1.38 per share, implying a decline of 34.9% from the year-ago reported figure.
Keysight has a long-term earnings growth expectation of 4.1%. KEYS delivered an average earnings surprise of 6.4% in the last four reported quarters.
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