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Altice USA, Inc. (ATUS - Free Report) reported relatively modest first-quarter 2022 results, wherein the bottom line beat the Zacks Consensus Estimate while the top line missed the same. The company has been accelerating the pace of its network rollouts and expects to better connect with customers with its rebranding campaign, thereby reporting improved performances in the long run.
Net Income
Net income in the quarter declined to $196.6 million or 43 cents per share from $274.1 million or 58 cents per share in the prior-year quarter, primarily due to top-line contraction. The bottom line, however, beat the Zacks Consensus Estimate by 13 cents.
Altice USA, Inc. Price, Consensus and EPS Surprise
Quarterly total revenues slipped to $2,421.9 million from $2,478.8 million in the prior year owing to a challenging macroeconomic environment. The top line missed the Zacks Consensus Estimate of $2,438 million.
The company made progress in its growth strategies by accelerating the 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 passings by the end of 2025. At quarter-end, Altice had 1.32 million FTTH passings, about 146,000 of which were added in the quarter. Broadband-only customer usage averaged 630 GB per month. Residential revenue per customer relationship declined 3% year over year to $137.92.
Residential revenues (which include Broadband, Video and Telephony) were $1,912.6 million, down 3.6% year over year due to a loss in customers. Business services and wholesale revenues remained relatively flat at $367.5 million. News and Advertising revenues were $114.7 million, up 9.1% driven by strength in the travel, entertainment, and sports betting segments.
Other Quarterly Details
Operating income declined to $512.5 million from $608.5 million in the year-ago quarter. Adjusted EBITDA was $991.7 million compared with $1,074.8 million in the prior-year quarter.
During the quarter, Altice upgraded its existing hybrid fiber-coaxial network to deliver higher speeds to customers in certain Suddenlink markets. The company has completed upgrades of about 16,000 households and aims to upgrade 100,000 homes in 2022.
It has extended its mobile virtual network operator (MVNO) agreement with T-Mobile US, Inc. (TMUS - Free Report) for its Optimum Mobile service. The multi-year deal, the terms of which were kept under wraps, will enable T-Mobile to serve as the nationwide network service provider for Optimum. The extension of the existing MVNO agreement will aim to offer seamless connectivity across the country. Optimum Mobile comes up with a plethora of attractive wireless plans to offer more choice and flexibility to choose and shift from one plan to the other without any extra charge. Customers will enjoy exclusive benefits and extra discounts if they select an integrated offering of the company’s broadband connectivity services and Optimum Mobile, with the option to cancel the plan anytime.
Cash Flow & Liquidity
Altice generated $600.2 million of cash from operating activities in the quarter compared with $749.6 million in the prior year. Free cash flow was $207.8 million, down from $536.8 million. As of Mar 31, 2022, the company’s cash and cash equivalents totaled $195.9 million with net debt of $24,220 million.
Nokia Corporation (NOK - Free Report) , carrying a Zacks Rank #2 (Buy), is a solid pick for investors in the industry. Earnings estimates for the current year for the stock have moved up 40% since April 2021.
Nokia pulled off a trailing four-quarter earnings surprise of 205.2%, on average and has a long-term earnings growth expectation of 10.4%. It has moved up 7.9% in the past year. Nokia is well-positioned for the ongoing technology cycle, given the strength of its end-to-end portfolio. The company’s deal win rate is encouraging, with notable successes in the key 5G markets of the United States and China.
KVH Industries, Inc. (KVHI - Free Report) , a Zacks Rank #2 stock, delivered an earnings surprise of 20%, on average, in the trailing four quarters.
Despite global supply chain disruptions, KVH Industries is driving growth and margin expansion through new product introduction and subscriber migration to High-Throughput Satellites. The company aims to make decisive inroads into the still-nascent autonomous transportation markets with a strong balance sheet and zero debt. If KVH Industries manages to effectively mitigate supply chain woes, there could be room for cash flow expansion.
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Altice (ATUS) Tops Q1 Earnings Estimates Despite Soft Revenues
Altice USA, Inc. (ATUS - Free Report) reported relatively modest first-quarter 2022 results, wherein the bottom line beat the Zacks Consensus Estimate while the top line missed the same. The company has been accelerating the pace of its network rollouts and expects to better connect with customers with its rebranding campaign, thereby reporting improved performances in the long run.
Net Income
Net income in the quarter declined to $196.6 million or 43 cents per share from $274.1 million or 58 cents per share in the prior-year quarter, primarily due to top-line contraction. The bottom line, however, beat the Zacks Consensus Estimate by 13 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 $2,421.9 million from $2,478.8 million in the prior year owing to a challenging macroeconomic environment. The top line missed the Zacks Consensus Estimate of $2,438 million.
The company made progress in its growth strategies by accelerating the 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 passings by the end of 2025. At quarter-end, Altice had 1.32 million FTTH passings, about 146,000 of which were added in the quarter. Broadband-only customer usage averaged 630 GB per month. Residential revenue per customer relationship declined 3% year over year to $137.92.
Residential revenues (which include Broadband, Video and Telephony) were $1,912.6 million, down 3.6% year over year due to a loss in customers. Business services and wholesale revenues remained relatively flat at $367.5 million. News and Advertising revenues were $114.7 million, up 9.1% driven by strength in the travel, entertainment, and sports betting segments.
Other Quarterly Details
Operating income declined to $512.5 million from $608.5 million in the year-ago quarter. Adjusted EBITDA was $991.7 million compared with $1,074.8 million in the prior-year quarter.
During the quarter, Altice upgraded its existing hybrid fiber-coaxial network to deliver higher speeds to customers in certain Suddenlink markets. The company has completed upgrades of about 16,000 households and aims to upgrade 100,000 homes in 2022.
It has extended its mobile virtual network operator (MVNO) agreement with T-Mobile US, Inc. (TMUS - Free Report) for its Optimum Mobile service. The multi-year deal, the terms of which were kept under wraps, will enable T-Mobile to serve as the nationwide network service provider for Optimum. The extension of the existing MVNO agreement will aim to offer seamless connectivity across the country. Optimum Mobile comes up with a plethora of attractive wireless plans to offer more choice and flexibility to choose and shift from one plan to the other without any extra charge. Customers will enjoy exclusive benefits and extra discounts if they select an integrated offering of the company’s broadband connectivity services and Optimum Mobile, with the option to cancel the plan anytime.
Cash Flow & Liquidity
Altice generated $600.2 million of cash from operating activities in the quarter compared with $749.6 million in the prior year. Free cash flow was $207.8 million, down from $536.8 million. As of Mar 31, 2022, the company’s cash and cash equivalents totaled $195.9 million with net debt of $24,220 million.
Zacks Rank & Stocks to Consider
Altice currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Sell) stocks here.
Nokia Corporation (NOK - Free Report) , carrying a Zacks Rank #2 (Buy), is a solid pick for investors in the industry. Earnings estimates for the current year for the stock have moved up 40% since April 2021.
Nokia pulled off a trailing four-quarter earnings surprise of 205.2%, on average and has a long-term earnings growth expectation of 10.4%. It has moved up 7.9% in the past year. Nokia is well-positioned for the ongoing technology cycle, given the strength of its end-to-end portfolio. The company’s deal win rate is encouraging, with notable successes in the key 5G markets of the United States and China.
KVH Industries, Inc. (KVHI - Free Report) , a Zacks Rank #2 stock, delivered an earnings surprise of 20%, on average, in the trailing four quarters.
Despite global supply chain disruptions, KVH Industries is driving growth and margin expansion through new product introduction and subscriber migration to High-Throughput Satellites. The company aims to make decisive inroads into the still-nascent autonomous transportation markets with a strong balance sheet and zero debt. If KVH Industries manages to effectively mitigate supply chain woes, there could be room for cash flow expansion.