A month has gone by since the last earnings report for Altice USA, Inc. (
ATUS Quick Quote ATUS - Free Report) . Shares have lost about 15.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Altice USA, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Altice's Q1 Earnings Beat Estimates, Revenues Falter Altice reported mixed second-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 $78.3 million or 17 cents per share from $106.2 million or 23 cents per share in the prior-year quarter, primarily due to top-line contraction. The bottom line, however, beat the Zacks Consensus Estimate by 12 cents.
Quarterly total revenues slipped to $2,324.3 million from $2,463 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 $2,330 million. The company made progress in its growth strategies by accelerating network enhancement and customer experience. At the quarter-end, Altice had 2.66 million FTTH (Fiber to the home) passings, about 287,000 of which were added in the April-June period. Broadband-only customer usage averaged 619 GB per month. FTTH broadband net additions were more than 40,000 in the quarter, led by increased migration of existing customers and higher fiber gross additions. Total fiber broadband customers reached 250,000 by the end of the quarter. Residential revenue per customer relationship declined 2.8% year over year to $137.44 due to the loss of higher ARPU video customers. Residential revenues (which include Broadband, Video and Telephony) were $1,835.2 million, down 5.7% year over year due to a loss in unique residential customers. Business services and wholesale revenues declined to $364.7 million from $371.6 million. News and Advertising revenues were $113.5 million, down 14.8% due to lower contributions from both political and non-political campaigns. Other Quarterly Details
Operating income declined to $482 million from $521.7 million in the year-ago quarter. Adjusted EBITDA was $921.7 million compared with $1,007.1 million in the prior-year quarter. Optimum Mobile witnessed healthy subscriber growth during the quarter, reaching 264,000 customers, representing a 5.8% 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 $855.7 million of cash from operating activities in the first six months of 2023 compared with $1,276.6 million in the year-ago period. As of Jun 30, 2023, the company’s net debt was $24,964 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 88.27% due to these changes.
Currently, Altice USA, Inc. has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Altice USA, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Altice USA, Inc. is part of the Zacks Communication - Components industry. Over the past month, Arista Networks (
ANET Quick Quote ANET - Free Report) , a stock from the same industry, has gained 9.8%. The company reported its results for the quarter ended June 2023 more than a month ago.
Arista Networks reported revenues of $1.46 billion in the last reported quarter, representing a year-over-year change of +38.7%. EPS of $1.58 for the same period compares with $1.08 a year ago.
For the current quarter, Arista Networks is expected to post earnings of $1.58 per share, indicating a change of +26.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.6% over the last 30 days.
Arista Networks has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.