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Altice (ATUS) Misses Q3 Earnings Estimates on Lower Revenues
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Altice USA, Inc. (ATUS - Free Report) reported soft third-quarter 2022 results, wherein the bottom line and top line missed the respective Zacks Consensus Estimate and declined year over year due to the challenging macroeconomic environment. Nevertheless, the company has been accelerating the pace of network rollouts and expects to enhance customer connection with its rebranding campaign, thereby reporting improved performances in the long run.
Net Income
Net income in the quarter declined to $85 million or 19 cents per share from $266.9 million or 58 cents per share in the prior-year quarter, primarily due to top-line contraction. The bottom line missed the Zacks Consensus Estimate by 15 cents.
Altice USA, Inc. Price, Consensus and EPS Surprise
Quarterly total revenues slipped to $2,393.6 million from $2,574.9 million in the prior year, owing to lower contributions from residential and advertising businesses due to macroeconomic uncertainty. The top line missed the consensus estimate of $2,455 million.
The company made progress in its growth strategies by accelerating network enhancement and customer experience. It plans to bring 100% fiber broadband to more than two-thirds of its footprint over the next four years to reach a total of 6.5 million FTTH (Fiber to the home) passings by the end of 2025. At quarter-end, Altice had 1.9 million FTTH passings, about 321,000 of which were added in the quarter.
Broadband-only customer usage averaged 576 GB per month. FTTH broadband net additions were more than 31,000 in the quarter, led by increased migrations of existing customers and higher fiber gross additions. Total fiber broadband customers reached 135,000 by the end of the quarter. Residential revenue per customer relationship declined 1.9% year over year to $138.12 due to the loss of higher ARPU video customers.
Residential revenues (which include Broadband, Video and Telephony) were $1,880.9 million, down 4.4% year over year due to a loss in customers of 50,000 residential customer relationships and a broadband net loss of 43,000. Business services and wholesale revenues declined to $366.6 million from $440.8 million. News and Advertising revenues were $120.5 million, down 16.1% due to lower contributions from both political and non-political campaigns.
Other Quarterly Details
Operating income declined to $467.3 million from $690.6 million in the year-ago quarter. Adjusted EBITDA was $954.4 million compared with $1,164.8 million in the prior-year quarter. Altice rebranded its national mobile service dubbed Altice Mobile to Optimum Mobile as part of its effort to align all the services under a single national Optimum brand. The rechristened Optimum Mobile witnessed healthy subscriber growth during the quarter, reaching 236,000 customers, representing 5.5% penetration of the residential customer base.
Cash Flow & Liquidity
Altice generated $629.2 million of cash from operating activities in the quarter compared with $698.3 million in the prior year, bringing the tallies for the first nine months of 2022 and 2021 to $1,905.7 million and $2,177.5 million, respectively. Free cash flow was $135.6 million, down 65.2% year over year. As of Sep 30, 2022, the company’s cash and cash equivalents totaled $250.8 million, with net debt of $24,405 million.
Zacks Rank & Stocks to Consider
Altice currently has a Zacks Rank #5 (Strong Sell).
TESSCO Technologies Incorporated , sporting a Zacks Rank #1, delivered an earnings surprise of 61.9%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 49.4% since August 2021.
TESSCO offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry.
Ooma Inc. (OOMA - Free Report) , carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 34.7%, on average, in the trailing four quarters. Earnings estimates for Ooma for the current year have moved up 5.4% since March 2022.
Ooma offers communications services and related technologies for businesses and consumers in the United States and Canada. It helps to create powerful connected experiences for businesses and consumers through its smart cloud-based SaaS platform.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2, is a solid pick for investors in the broader industry. It delivered a modest earnings surprise of 12.4%, on average, in the trailing four quarters.
Earnings estimates for the current year for Viavi have moved up 7.9% since October 2021, while that for the next year is up 18.7%. It boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.
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Altice (ATUS) Misses Q3 Earnings Estimates on Lower Revenues
Altice USA, Inc. (ATUS - Free Report) reported soft third-quarter 2022 results, wherein the bottom line and top line missed the respective Zacks Consensus Estimate and declined year over year due to the challenging macroeconomic environment. Nevertheless, the company has been accelerating the pace of network rollouts and expects to enhance customer connection with its rebranding campaign, thereby reporting improved performances in the long run.
Net Income
Net income in the quarter declined to $85 million or 19 cents per share from $266.9 million or 58 cents per share in the prior-year quarter, primarily due to top-line contraction. The bottom line missed the Zacks Consensus Estimate by 15 cents.
Altice USA, Inc. Price, Consensus and EPS Surprise
Altice USA, Inc. price-consensus-eps-surprise-chart | Altice USA, Inc. Quote
Revenues
Quarterly total revenues slipped to $2,393.6 million from $2,574.9 million in the prior year, owing to lower contributions from residential and advertising businesses due to macroeconomic uncertainty. The top line missed the consensus estimate of $2,455 million.
The company made progress in its growth strategies by accelerating network enhancement and customer experience. It plans to bring 100% fiber broadband to more than two-thirds of its footprint over the next four years to reach a total of 6.5 million FTTH (Fiber to the home) passings by the end of 2025. At quarter-end, Altice had 1.9 million FTTH passings, about 321,000 of which were added in the quarter.
Broadband-only customer usage averaged 576 GB per month. FTTH broadband net additions were more than 31,000 in the quarter, led by increased migrations of existing customers and higher fiber gross additions. Total fiber broadband customers reached 135,000 by the end of the quarter. Residential revenue per customer relationship declined 1.9% year over year to $138.12 due to the loss of higher ARPU video customers.
Residential revenues (which include Broadband, Video and Telephony) were $1,880.9 million, down 4.4% year over year due to a loss in customers of 50,000 residential customer relationships and a broadband net loss of 43,000. Business services and wholesale revenues declined to $366.6 million from $440.8 million. News and Advertising revenues were $120.5 million, down 16.1% due to lower contributions from both political and non-political campaigns.
Other Quarterly Details
Operating income declined to $467.3 million from $690.6 million in the year-ago quarter. Adjusted EBITDA was $954.4 million compared with $1,164.8 million in the prior-year quarter. Altice rebranded its national mobile service dubbed Altice Mobile to Optimum Mobile as part of its effort to align all the services under a single national Optimum brand. The rechristened Optimum Mobile witnessed healthy subscriber growth during the quarter, reaching 236,000 customers, representing 5.5% penetration of the residential customer base.
Cash Flow & Liquidity
Altice generated $629.2 million of cash from operating activities in the quarter compared with $698.3 million in the prior year, bringing the tallies for the first nine months of 2022 and 2021 to $1,905.7 million and $2,177.5 million, respectively. Free cash flow was $135.6 million, down 65.2% year over year. As of Sep 30, 2022, the company’s cash and cash equivalents totaled $250.8 million, with net debt of $24,405 million.
Zacks Rank & Stocks to Consider
Altice currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Sell) stocks here.
TESSCO Technologies Incorporated , sporting a Zacks Rank #1, delivered an earnings surprise of 61.9%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 49.4% since August 2021.
TESSCO offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry.
Ooma Inc. (OOMA - Free Report) , carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 34.7%, on average, in the trailing four quarters. Earnings estimates for Ooma for the current year have moved up 5.4% since March 2022.
Ooma offers communications services and related technologies for businesses and consumers in the United States and Canada. It helps to create powerful connected experiences for businesses and consumers through its smart cloud-based SaaS platform.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2, is a solid pick for investors in the broader industry. It delivered a modest earnings surprise of 12.4%, on average, in the trailing four quarters.
Earnings estimates for the current year for Viavi have moved up 7.9% since October 2021, while that for the next year is up 18.7%. It boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.