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Altice USA, Inc. (ATUS) Down 21% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Altice USA, Inc. (ATUS - Free Report) . Shares have lost about 21% 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 catalysts.
Altice Beats on Q3 Earnings Despite Lower Revenues
Altice's third-quarter 2023 bottom and top line beat the respective Zacks Consensus Estimate. However, both metrics declined year over year due to a challenging macroeconomic environment. Nevertheless, the company has been accelerating the pace of network rollouts with an improvement in broadband subscribers, mobile net additions and fiber customer growth.
Quarter Details
Net income in the quarter declined to $66.8 million or 15 cents per share from $84.9 million or 19 cents per share in the prior-year quarter, primarily due to top-line contraction. The bottom line, however, beat the Zacks Consensus Estimate by 6 cents.
Quarterly total revenues slipped to $2,317.2 million from $2,393.6 million in the prior year, owing to lower contributions from residential and advertising businesses due to macroeconomic uncertainty. The top line beat the consensus estimate of $2,295 million.
The company made progress in its growth strategies by accelerating network enhancement and customer experience. At the quarter-end, Altice had 2.72 million FTTH (Fiber to the home) passings, about 60,700 of which were added in the July-September period. Broadband-only customer usage averaged 659 GB per month.
FTTH broadband net additions were more than 45,000 in the quarter, led by increased migration of existing customers and higher fiber gross additions. Total fiber broadband customers reached 295,000 by the end of the quarter. Residential revenue per customer relationship declined 0.6% year over year to $138.42 due to the loss of higher ARPU video customers.
Residential revenues (which include Broadband, Video and Telephony) were $1,831.5 million, down 3.4% year over year due to a loss in unique residential customers. Business services and wholesale revenues remained flat at $366.8 million. News and Advertising revenues were $107.5 million, down 10.8% due to lower contributions from both political campaigns.
Other Quarterly Details
Operating income improved to $492.6 million from $467.3 million in the year-ago quarter. Adjusted EBITDA was $915.5 million compared with $954.4 million in the prior-year quarter. Optimum Mobile witnessed healthy subscriber growth during the quarter, reaching 288,000 customers, representing a 6.3% 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 $1,330.2 million of cash from operating activities in the first nine months of 2023 compared with $1,905.7 million in the year-ago period. As of Sep 30, 2023, the company’s net debt was $24,910 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -35% due to these changes.
VGM Scores
At this time, Altice USA, Inc. has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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 - Free Report) , a stock from the same industry, has gained 3.8%. The company reported its results for the quarter ended September 2023 more than a month ago.
Arista Networks reported revenues of $1.51 billion in the last reported quarter, representing a year-over-year change of +28.3%. EPS of $1.83 for the same period compares with $1.25 a year ago.
Arista Networks is expected to post earnings of $1.70 per share for the current quarter, representing a year-over-year change of +20.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.6%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Arista Networks. Also, the stock has a VGM Score of C.
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Altice USA, Inc. (ATUS) Down 21% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Altice USA, Inc. (ATUS - Free Report) . Shares have lost about 21% 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 catalysts.
Altice Beats on Q3 Earnings Despite Lower Revenues
Altice's third-quarter 2023 bottom and top line beat the respective Zacks Consensus Estimate. However, both metrics declined year over year due to a challenging macroeconomic environment. Nevertheless, the company has been accelerating the pace of network rollouts with an improvement in broadband subscribers, mobile net additions and fiber customer growth.
Quarter Details
Net income in the quarter declined to $66.8 million or 15 cents per share from $84.9 million or 19 cents per share in the prior-year quarter, primarily due to top-line contraction. The bottom line, however, beat the Zacks Consensus Estimate by 6 cents.
Quarterly total revenues slipped to $2,317.2 million from $2,393.6 million in the prior year, owing to lower contributions from residential and advertising businesses due to macroeconomic uncertainty. The top line beat the consensus estimate of $2,295 million.
The company made progress in its growth strategies by accelerating network enhancement and customer experience. At the quarter-end, Altice had 2.72 million FTTH (Fiber to the home) passings, about 60,700 of which were added in the July-September period. Broadband-only customer usage averaged 659 GB per month.
FTTH broadband net additions were more than 45,000 in the quarter, led by increased migration of existing customers and higher fiber gross additions. Total fiber broadband customers reached 295,000 by the end of the quarter. Residential revenue per customer relationship declined 0.6% year over year to $138.42 due to the loss of higher ARPU video customers.
Residential revenues (which include Broadband, Video and Telephony) were $1,831.5 million, down 3.4% year over year due to a loss in unique residential customers. Business services and wholesale revenues remained flat at $366.8 million. News and Advertising revenues were $107.5 million, down 10.8% due to lower contributions from both political campaigns.
Other Quarterly Details
Operating income improved to $492.6 million from $467.3 million in the year-ago quarter. Adjusted EBITDA was $915.5 million compared with $954.4 million in the prior-year quarter. Optimum Mobile witnessed healthy subscriber growth during the quarter, reaching 288,000 customers, representing a 6.3% 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 $1,330.2 million of cash from operating activities in the first nine months of 2023 compared with $1,905.7 million in the year-ago period. As of Sep 30, 2023, the company’s net debt was $24,910 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -35% due to these changes.
VGM Scores
At this time, Altice USA, Inc. has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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 - Free Report) , a stock from the same industry, has gained 3.8%. The company reported its results for the quarter ended September 2023 more than a month ago.
Arista Networks reported revenues of $1.51 billion in the last reported quarter, representing a year-over-year change of +28.3%. EPS of $1.83 for the same period compares with $1.25 a year ago.
Arista Networks is expected to post earnings of $1.70 per share for the current quarter, representing a year-over-year change of +20.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.6%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Arista Networks. Also, the stock has a VGM Score of C.