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Cable ONE (CABO) Misses Earnings, Beats Revenue in Q3
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Small-sized cable MSO (multi service operator) Cable ONE Inc. (CABO - Free Report) reported mixed financial results in the third quarter of 2016 wherein the top line surpassed the Zacks Consensus Estimate by a nominal margin and the bottom line missed the same.
Cable ONE operates in a highly competitive cable market where it faces intense competition from leading cable multi-service-operators MSOs like Comcast Corp. (CMCSA - Free Report) and Charter Communications Inc. (CHTR - Free Report) .
Net income was $20.9 million, highlighting an increase of 7.5% from the third quarter of 2015. Third quarter earnings per share of $3.63 lagged the Zacks Consensus Estimate of $4.94.
Total revenue was $205.536 million, up 3.7% year over year and slightly above the Zacks Consensus Estimate of $205 million. Of the total, Residential Data revenues were approximately $86.8 million, up 18.8%. Residential Video revenues totaled $74 million, down 9.1%. Residential Voice revenues were $10.5 million, down 12.3%. Business Services segment generated $25.4 million in revenues, up 13.2%. Advertising sales were $6.5 million, down 11.2%. Other revenues were $2.6 million, up 12.4%.
In the reported quarter, operating expenses totaled $161.7 million, up 1.6% year over year. Operating income was $43.8 million, up 12.4% year over year. Adjusted EBITDA was $87.2 million, up 12.6% year over year, with a net profit margin of 10.2%. Adjusted EBITDA margins have increased more than 300 basis points from 39.1% to 42.4% during the last year, due to revenue growth in residential HSD and Business Services.
Cash Flow
In the third quarter of 2016, Cable ONE generated $68 million of cash from operations, a decrease of 12.3% year over year.
Liquidity
At the end of the third quarter of 2016, Cable ONE had $123.7 million of cash and cash equivalents compared with $119.2 million at the end of 2015.
Operating Statistics
As of Sep 30, 2016, the total customer base of Cable ONE was 658,088, down 1.4% year over year. Non-video customer base was 324,352, up 14.7% year over year. Non-video customers accounted for 49% of the total customer count compared with 42% at the end of the year-ago quarter.
Residential Segment: Total customers were 607,399, down 2.2% year over year. Data customers were 466,668, up 1.9%. Video customers were 315,589, down 13.8%. Voice customer count totaled 100,510, down 12.8%. PSU customers were 882,767, down 6%.
Business Segment: Total customers were 50,689, up 9.6% year over year. Data customers were 43,905, up 12.9%. Video subscribers were 13,797, down 4.9%. Voice customer count totaled 17,695, up 14.1%. PSU customers were 75,397, up 9.4%.
Average Revenue Per User (ARPU): Residential data ARPU was $62.07, up 16.6%. Residential video ARPU was $76.85, up 6.7%. Residential voice ARPU was $34.18, up 1.2%. Business services ARPU was $168.80, up 2.7%. Total customer ARPU was $103.96, up 5.4%.
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Cable ONE (CABO) Misses Earnings, Beats Revenue in Q3
Small-sized cable MSO (multi service operator) Cable ONE Inc. (CABO - Free Report) reported mixed financial results in the third quarter of 2016 wherein the top line surpassed the Zacks Consensus Estimate by a nominal margin and the bottom line missed the same.
Cable ONE operates in a highly competitive cable market where it faces intense competition from leading cable multi-service-operators MSOs like Comcast Corp. (CMCSA - Free Report) and Charter Communications Inc. (CHTR - Free Report) .
Net income was $20.9 million, highlighting an increase of 7.5% from the third quarter of 2015. Third quarter earnings per share of $3.63 lagged the Zacks Consensus Estimate of $4.94.
Total revenue was $205.536 million, up 3.7% year over year and slightly above the Zacks Consensus Estimate of $205 million. Of the total, Residential Data revenues were approximately $86.8 million, up 18.8%. Residential Video revenues totaled $74 million, down 9.1%. Residential Voice revenues were $10.5 million, down 12.3%. Business Services segment generated $25.4 million in revenues, up 13.2%. Advertising sales were $6.5 million, down 11.2%. Other revenues were $2.6 million, up 12.4%.
In the reported quarter, operating expenses totaled $161.7 million, up 1.6% year over year. Operating income was $43.8 million, up 12.4% year over year. Adjusted EBITDA was $87.2 million, up 12.6% year over year, with a net profit margin of 10.2%. Adjusted EBITDA margins have increased more than 300 basis points from 39.1% to 42.4% during the last year, due to revenue growth in residential HSD and Business Services.
Cash Flow
In the third quarter of 2016, Cable ONE generated $68 million of cash from operations, a decrease of 12.3% year over year.
Liquidity
At the end of the third quarter of 2016, Cable ONE had $123.7 million of cash and cash equivalents compared with $119.2 million at the end of 2015.
Operating Statistics
As of Sep 30, 2016, the total customer base of Cable ONE was 658,088, down 1.4% year over year. Non-video customer base was 324,352, up 14.7% year over year. Non-video customers accounted for 49% of the total customer count compared with 42% at the end of the year-ago quarter.
Residential Segment: Total customers were 607,399, down 2.2% year over year. Data customers were 466,668, up 1.9%. Video customers were 315,589, down 13.8%. Voice customer count totaled 100,510, down 12.8%. PSU customers were 882,767, down 6%.
Business Segment: Total customers were 50,689, up 9.6% year over year. Data customers were 43,905, up 12.9%. Video subscribers were 13,797, down 4.9%. Voice customer count totaled 17,695, up 14.1%. PSU customers were 75,397, up 9.4%.
Average Revenue Per User (ARPU): Residential data ARPU was $62.07, up 16.6%. Residential video ARPU was $76.85, up 6.7%. Residential voice ARPU was $34.18, up 1.2%. Business services ARPU was $168.80, up 2.7%. Total customer ARPU was $103.96, up 5.4%.
CABLE ONE INC Price, Consensus and EPS Surprise
CABLE ONE INC Price, Consensus and EPS Surprise | CABLE ONE INC Quote
Zacks Rank and a Key Pick
Cable ONE has a Zacks Rank #3 (Hold).
Meanwhile, here’s a company that has the right combination of elements to post an earnings beat this quarter.
Sprint Corp. (S - Free Report) , with an Earnings ESP of +14.29% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters.
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Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>