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Altice USA, Inc. (ATUS - Free Report) reported relatively modest first-quarter 2023 results, wherein the bottom line beat the Zacks Consensus Estimate but the top line missed the same. However, both metrics declined year over year due to a 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 performance in the long run.
Quarter Details
Net income in the quarter declined to $25.9 million or 6 cents per share from $196.6 million or 43 cents per share in the prior-year quarter, primarily due to top-line contraction. The bottom line, however, beat the Zacks Consensus Estimate by a penny.
Altice USA, Inc. Price, Consensus and EPS Surprise
Quarterly total revenues slipped to $2,294 million from $2,421.9 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 $2,323 million.
The company made progress in its growth strategies by accelerating network enhancement and customer experience. At the quarter-end, Altice had 2.37 million FTTH (Fiber to the home) passings, about 214,000 of which were added in the January-March period. Broadband-only customer usage averaged 625 GB per month. FTTH broadband net additions were more than 38,000 in the quarter, led by increased migration of existing customers and higher fiber gross additions. Total fiber broadband customers reached 210,000 by the end of the quarter. Residential revenue per customer relationship declined 2.7% year over year to $134.16 due to the loss of higher ARPU video customers.
Residential revenues (which include Broadband, Video and Telephony) were $1,805.3 million, down 5.6% year over year due to a loss in unique residential customers of more than 26,000. Business services and wholesale revenues declined to $363.5 million from $367.5 million. News and Advertising revenues were $98.7 million, down 13.9% due to lower contributions from both political and non-political campaigns.
Other Quarterly Details
Operating income declined to $425.1 million from $512.5 million in the year-ago quarter. Adjusted EBITDA was $868.4 million compared with $991.7 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 248,000 customers, representing 5.4% penetration of the residential customer base.
Altice has been accelerating the pace of its network extension and remains well on track to reach more than 150,000 passings in 2023. The company is witnessing solid customer penetration, typically reaching approximately 40% within a year of rollout in new-build areas.
Cash Flow & Liquidity
Altice generated $416.8 million of cash from operating activities in the first quarter compared with $600.2 million in the year-ago period. As of Mar 31, 2023, the company’s net debt was $24,846 million.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 (Buy), is likely to benefit from the strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 14.2% and delivered an earnings surprise of 14.7%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Comtech Telecommunications Corp. (CMTL - Free Report) , carrying a Zacks Rank #2, is a solid pick. Headquartered in Melville, NY, the company is a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies to commercial and government customers.
Comtech’s key satellite earth station modems incorporate forward error correction and bandwidth compression technologies, which enable its customers to optimize their satellite networks by either reducing their satellite transponder lease costs or increasing data throughput. It holds leadership positions in the market for high-throughput modems used in cellular backhaul.
IHS Holding Limited (IHS - Free Report) , carrying a Zacks Rank #2, is another key pick. Based in London, the United Kingdom, it is one of the largest independent owners, operators, and developers of shared communications infrastructure in the world by tower count.
IHS Holding has more than 39,000 towers across its 11 markets: Brazil, Cameroon, Colombia, Egypt, Kuwait, Nigeria, Peru, Rwanda, South Africa and Zambia. The stock has gained 59.5% in the past six months.
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Altice's (ATUS) Q1 Earnings Beat Estimates, Revenues Falter
Altice USA, Inc. (ATUS - Free Report) reported relatively modest first-quarter 2023 results, wherein the bottom line beat the Zacks Consensus Estimate but the top line missed the same. However, both metrics declined year over year due to a 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 performance in the long run.
Quarter Details
Net income in the quarter declined to $25.9 million or 6 cents per share from $196.6 million or 43 cents per share in the prior-year quarter, primarily due to top-line contraction. The bottom line, however, beat the Zacks Consensus Estimate by a penny.
Altice USA, Inc. Price, Consensus and EPS Surprise
Altice USA, Inc. price-consensus-eps-surprise-chart | Altice USA, Inc. Quote
Quarterly total revenues slipped to $2,294 million from $2,421.9 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 $2,323 million.
The company made progress in its growth strategies by accelerating network enhancement and customer experience. At the quarter-end, Altice had 2.37 million FTTH (Fiber to the home) passings, about 214,000 of which were added in the January-March period. Broadband-only customer usage averaged 625 GB per month. FTTH broadband net additions were more than 38,000 in the quarter, led by increased migration of existing customers and higher fiber gross additions. Total fiber broadband customers reached 210,000 by the end of the quarter. Residential revenue per customer relationship declined 2.7% year over year to $134.16 due to the loss of higher ARPU video customers.
Residential revenues (which include Broadband, Video and Telephony) were $1,805.3 million, down 5.6% year over year due to a loss in unique residential customers of more than 26,000. Business services and wholesale revenues declined to $363.5 million from $367.5 million. News and Advertising revenues were $98.7 million, down 13.9% due to lower contributions from both political and non-political campaigns.
Other Quarterly Details
Operating income declined to $425.1 million from $512.5 million in the year-ago quarter. Adjusted EBITDA was $868.4 million compared with $991.7 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 248,000 customers, representing 5.4% penetration of the residential customer base.
Altice has been accelerating the pace of its network extension and remains well on track to reach more than 150,000 passings in 2023. The company is witnessing solid customer penetration, typically reaching approximately 40% within a year of rollout in new-build areas.
Cash Flow & Liquidity
Altice generated $416.8 million of cash from operating activities in the first quarter compared with $600.2 million in the year-ago period. As of Mar 31, 2023, the company’s net debt was $24,846 million.
Zacks Rank & Stocks to Consider
Altice currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 (Buy), is likely to benefit from the strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 14.2% and delivered an earnings surprise of 14.7%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Comtech Telecommunications Corp. (CMTL - Free Report) , carrying a Zacks Rank #2, is a solid pick. Headquartered in Melville, NY, the company is a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies to commercial and government customers.
Comtech’s key satellite earth station modems incorporate forward error correction and bandwidth compression technologies, which enable its customers to optimize their satellite networks by either reducing their satellite transponder lease costs or increasing data throughput. It holds leadership positions in the market for high-throughput modems used in cellular backhaul.
IHS Holding Limited (IHS - Free Report) , carrying a Zacks Rank #2, is another key pick. Based in London, the United Kingdom, it is one of the largest independent owners, operators, and developers of shared communications infrastructure in the world by tower count.
IHS Holding has more than 39,000 towers across its 11 markets: Brazil, Cameroon, Colombia, Egypt, Kuwait, Nigeria, Peru, Rwanda, South Africa and Zambia. The stock has gained 59.5% in the past six months.