Altice USA, Inc. (ATUS) reported mixed fourth-quarter 2023 results – with the top line beating the Zacks Consensus Estimate, and the bottom line missing the same mark. Despite a year-over-year revenue decline attributed to soft demand trends in the Residential, News, and Advertising segments, the company’s focus on network upgrades, improving customer care, AI integration, and financial discipline offers some upside.
Net Income
Altice reported a net loss of $117.8 million or a loss of 26 cents per share, compared with a loss of $193.1 million or 43 cents per share in the prior-year quarter. Factors contributing to a narrower loss include an income tax benefit and lower operating expenses, although the bottom line missed the Zacks Consensus Estimate by 33 cents. In 2023, net income was $53.2 million, down from $194.6 million in 2022.
Revenues
Total revenues in the quarter were $2.3 billion, down from $2.36 billion in the prior-year quarter. The decline was attributed to falling net sales from broadband and video customers. Nonetheless, the top line managed to beat the consensus estimate by $13 million. In 2023, net sales totaled $9.23 billion, compared with $9.64 billion in 2022.
The company made progress in its growth strategies by accelerating network enhancement and customer experience. Altice had 2.73 million Fiber to the Home (FTTH) passings, including over 14,900 additions in the September-December period. FTTH broadband net additions exceeded 46,000, driven by increased migration of existing customers and higher fiber gross additions. Total fiber broadband customers reached 341,000 by the end of the quarter. Residential average revenue per user (ARPU) improved marginally by 0.1% year over year to $136.01. Despite losses of video subscribers, greater mobile penetration, lower churn rate, and AI implementation across care and retention centers supported the ARPU.
Business services and wholesale revenues increased to $372 million from $368.4 million in the year-ago quarter, driven by growth in Lightpath revenues. News and Advertising revenues were $128.1 million, down from $151.8 million in the year-earlier quarter, due to lower political advertising revenues. Residential revenues were $1.79 billion, down from $1.83 billion in the year-earlier quarter, primarily due to the loss of higher ARPU video customers.
Other Quarterly Details
Operating income improved to $302.3 million from $301.1 million in the year-ago quarter. Adjusted EBITDA was $903.3 million compared with $913.3 million in the prior-year quarter. Optimum Mobile witnessed healthy subscriber growth, reaching 322,000 customers, representing a 7.1% penetration of the company’s total broadband customer base. Altice’s total passings grew by more than 165,000, reaching 9.6 million at the end of the full year 2023.
Cash Flow & Liquidity
In 2023, Altice generated $1.82 billion of cash from operating activities compared with $2.36 billion in 2022. As of Dec 31, 2023, the company’s net debt was $24.82 billion.
Zacks Rank & Stocks to Consider
Altice currently has a Zacks Rank #3 (Hold). NVIDIA Corporation (NVDA), currently carrying a Zacks Rank #2 (Buy), delivered a trailing four-quarter average earnings surprise of 18.99%. In the last reported quarter, it delivered an earnings surprise of 19.64%. QUALCOMM Incorporated (QCOM) and Arista Networks, Inc. (ANET) are also companies with impressive performance.
At a juncture when Altice suffers a narrow fiscal miss, all attention may gravitate toward the industry’s prevailing landscape as when plot twists define a movie’s gripping intensity. This stumble, though noticeable, doesn’t necessarily signify the company’s impending doom. It compels investors to recognize the need for due diligence before considering future avenues. In a realm of uncertainty, scrutiny becomes second nature: a flashlight leading hikers through fog-shrouded paths.
Amid shifting market forces, investors should ponder upon the era of disruption. Companies face volatility as a captain faces a tempest; watching dark clouds cloak the horizon. Nonetheless, resilience would be the ship’s safe harbor – navigating rough waters to emerge stronger.
Financial wisdom isn’t solely about trailing commas and decimal points; it’s the quintessence of market acumen. Being attendant to the market’s pulse, investors must make choices not on impulse but based on comprehension, much like intrepid explorers charting new territories. It is this mindful approach that may lead to ventures bearing fruit—a metaphorical treasure chest hidden from casual view amidst the vast ocean that is the market.
As Altice rekindles its financial journey, it’s akin to the perseverance of a marathon runner pressing forward after stumbling. The company’s strides to recalibrate serve as a visible beacon—a clarion call that amidst market clamor, it’s essential to keep a steadying hand, always watching the financial horizon.
Amid market commotion, investors are akin to gardeners nurturing companies, tending to their growth. As Altice contends with the trimester’s results, it’s akin to watching a sprout bend under gusty winds. Yet, it proves resilient in its pursuit of sunlight—much like investors seeking luminous prospects amidst market volatility.
