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Altice (ATUS) Q2 Loss Wider Than Estimated, Revenues Miss

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Altice USA, Inc.ATUS reported dismal results with wider-than-expected loss in second-quarter 2018.

Net Loss

Quarterly net loss came in at $97.9 million or loss of 13 cents per share compared with a net loss of $480.3 million or loss of 73 cents per share in the year-ago quarter. The improvement was mostly driven by higher debt extinguishment charges in the year-ago quarter.

Adjusted loss per share was 8 cents compared with loss of 17 cents in the year-ago quarter. The figure was wider than the Zacks Consensus Estimate of loss of 5 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 1.8% year over year to $2,364.2 million driven by growth in Residential, Business Services and Advertising businesses. The figure, however, missed the Zacks Consensus Estimate of $2,372 million.

Broadband revenues were $712.2 million, up 10.8% year over year. Business services and wholesale revenues came in at $337.4 million, up 4.2%. Advertising revenues totaled $109.9 million, up 12.7% and Pay TV revenues were $1,034.4 million, down 3.4%. Telephony revenues were $163.5 million, down 8.3% and Other revenues came in at $6.8 million, down 26.3%.

Quarterly operating income was $335.1 million compared with $253.3 million in the year-ago quarter mainly due to decline in depreciation and amortization. Adjusted EBITDA grew 1.5% in the second quarter to $1,005.5 million. Quarterly adjusted EBITDA margin remained flat year over year at 42.5%.

Cash Flow & Balance Sheet

Operating free cash flow for the quarter was down 2.5% to $765 million, reflecting increased investment in new fiber-to-the-home and the launch of Altice One. Cash capital expenditure was $241 million, representing 10.2% of revenues.

At the end of second-quarter 2018, the company's net debt was $21,655 million, reflecting the $1.5 billion cash dividend paid prior to completion of the spin-off of the company from Altice N.V.

Guidance

For full-year 2018, Altice anticipates revenues to be up 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 #4 (Sell). Better-ranked stocks in the broader industry include Arista Networks, Inc. ANET , Corning Incorporated GLW and SeaChange International, Inc. SEAC , 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 25.5%.

Corning has a long-term earnings growth expectation of 8.2%. It beat earnings estimates in each the trailing four quarters, the average being 3.8%.

SeaChange has a long-term earnings growth expectation of 10%. It surpassed earnings estimates thrice in the trailing four quarters with an average positive surprise of 282.8%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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