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Altice (ATUS) Beats Q3 Earnings Estimates on Record Margins
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Altice USA, Inc. (ATUS - Free Report) reported all-time best results in third-quarter 2018 with healthy year-over-year increase in earnings and revenues, driven by improved subscriber trends, highest ever margin and higher free cash flow.
Quarterly net income was $32.6 million or 4 cents per share against a net loss of $192.6 million or loss of 26 cents per share in the year-ago quarter. The radical improvement was mostly driven by higher revenues and lower depreciation and amortization charges. The reported earnings comfortably beat the Zacks Consensus Estimate of loss of 4 cents.
Altice USA, Inc. Price, Consensus and EPS Surprise
Total revenues increased 4.1% year over year to $2,417.8 million driven by growth across all business segments and beat the Zacks Consensus Estimate of $2,401 million.
Residential revenues were $1,945.9 million, up 2.4% year over year with improving customer trends and net additions in broadband business. Average revenue per user increased 2.3% year over year to $143. Business services revenues were $344.2 million, up 6% with both the Enterprise and SMB units continuing to trend well, due to improved value proposition with voice and data bundles and reduced churn.
Advertising revenues totaled $123.1 million, up 37.8% owing to higher targeted data and analytics revenues. During the quarter, its cross-section advertising firm a4 launched Athena, a new self-serve client application for end-to-end multi-screen campaign management with “one-stop shopping” for advertisers. With in-depth reporting, measurement and analytics services, Athena has become the primary growth driver of a4.
Quarterly operating income improved significantly to $505.6 million from $120.6 million in the year-ago quarter mainly due to decline in depreciation and amortization. Adjusted EBITDA was $1,070.5 million compared with $1,012.3 million in the prior year.
Cash Flow & Balance Sheet
Operating free cash flow for the quarter was down 2.8% to $736 million, reflecting increased investment in new fiber-to-the-home. Free cash flow increased 28.0% year over year in the quarter to $276 million, bringing the year-to-date figure to $937 million, up 66.4%. At the end of third-quarter 2018, the company’s net debt was $21,562 million.
Guidance Reiterated
For full-year 2018, Altice continues to anticipate revenue growth of 2.5-3% year over year. The company also reiterated the plan to expand its adjusted EBITDA and cash flow margins, over the medium to long term.
Arista has a long-term earnings growth expectation of 21.2%. It beat earnings estimates in each the trailing four quarters, the average being 13.4%.
Corning has a long-term earnings growth expectation of 8.8%. It beat earnings estimates in each the trailing four quarters, the average being 4.1%.
Knowles has a long-term earnings growth expectation of 10%. It surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 11%.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
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Altice (ATUS) Beats Q3 Earnings Estimates on Record Margins
Altice USA, Inc. (ATUS - Free Report) reported all-time best results in third-quarter 2018 with healthy year-over-year increase in earnings and revenues, driven by improved subscriber trends, highest ever margin and higher free cash flow.
Quarterly net income was $32.6 million or 4 cents per share against a net loss of $192.6 million or loss of 26 cents per share in the year-ago quarter. The radical improvement was mostly driven by higher revenues and lower depreciation and amortization charges. The reported earnings comfortably beat the Zacks Consensus Estimate of loss of 4 cents.
Altice USA, Inc. Price, Consensus and EPS Surprise
Altice USA, Inc. Price, Consensus and EPS Surprise | Altice USA, Inc. Quote
Quarter Details
Total revenues increased 4.1% year over year to $2,417.8 million driven by growth across all business segments and beat the Zacks Consensus Estimate of $2,401 million.
Residential revenues were $1,945.9 million, up 2.4% year over year with improving customer trends and net additions in broadband business. Average revenue per user increased 2.3% year over year to $143. Business services revenues were $344.2 million, up 6% with both the Enterprise and SMB units continuing to trend well, due to improved value proposition with voice and data bundles and reduced churn.
Advertising revenues totaled $123.1 million, up 37.8% owing to higher targeted data and analytics revenues. During the quarter, its cross-section advertising firm a4 launched Athena, a new self-serve client application for end-to-end multi-screen campaign management with “one-stop shopping” for advertisers. With in-depth reporting, measurement and analytics services, Athena has become the primary growth driver of a4.
Quarterly operating income improved significantly to $505.6 million from $120.6 million in the year-ago quarter mainly due to decline in depreciation and amortization. Adjusted EBITDA was $1,070.5 million compared with $1,012.3 million in the prior year.
Cash Flow & Balance Sheet
Operating free cash flow for the quarter was down 2.8% to $736 million, reflecting increased investment in new fiber-to-the-home. Free cash flow increased 28.0% year over year in the quarter to $276 million, bringing the year-to-date figure to $937 million, up 66.4%. At the end of third-quarter 2018, the company’s net debt was $21,562 million.
Guidance Reiterated
For full-year 2018, Altice continues to anticipate revenue growth of 2.5-3% year over year. The company also reiterated the plan to expand its adjusted EBITDA and cash flow margins, over the medium to long term.
Zacks Rank & Stocks to Consider
Altice currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industry include Arista Networks, Inc. (ANET - Free Report) , Corning Incorporated (GLW - Free Report) and Knowles Corporation (KN - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista has a long-term earnings growth expectation of 21.2%. It beat earnings estimates in each the trailing four quarters, the average being 13.4%.
Corning has a long-term earnings growth expectation of 8.8%. It beat earnings estimates in each the trailing four quarters, the average being 4.1%.
Knowles has a long-term earnings growth expectation of 10%. It surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 11%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>