Altice USA (ATUS) Earnings and Revenues Top Estimates in Q4

Altice USA Inc. ATUS delivered better-than-expected financial results for the fourth quarter of 2017. Both the top and bottom line outpaced the Zacks Consensus Estimate.

Net Income

On a GAAP basis, net income in the fourth quarter was $2,235.8 million or $3.06 per share against a net loss of $236.7 million or a loss of 36 cents per share in the prior-year quarter. However, it reported adjusted earnings per share of break-even, better than the Zacks Consensus Estimate of a loss of a penny per share.

Altice USA, Inc. Price, Consensus and EPS Surprise

 

Altice USA, Inc. Price, Consensus and EPS Surprise | Altice USA, Inc. Quote

Revenue

Quarterly total revenues of $2,365.4 million increased 2.6% year over year and surpassed the Zacks Consensus Estimate of $2,355.2 million. Pay-TV revenues were $1,029.1 million, down 2.8% year over year. Broadband revenues were $676.5 million, up 13.1%. Telephony revenues were $199.9 million, down 7%. Business services and wholesale segment revenues were $330.5 million, up 5.1%. Advertising revenues were $121.7 million, up 9.9%. Other revenues were $7.6 million, down 13.9% year over year.

Operating Metrics

Quarterly operating income was $225.5 million compared with $217.2 million in the year-ago quarter. Adjusted EBITDA grew 12.2% year over year in fourth-quarter 2017 to $1,043.3 million. Quarterly adjusted EBITDA margin was 44.1% compared with 40.3% in the prior-year quarter.

Cash Flow

Operating free cash flow for Altice USA in the fourth quarter grew 19.6% year over year to $815 million. Operating free cash flow growth rate at the Optimum and Suddenlink segments were 20.4% and 17.8%, respectively, on a year-over-year basis.

Liquidity

At the end of 2017, Altice USA had $273 million of cash and $22,516 million of debt outstanding.

Subscriber Statistics

Total customer relationships in the fourth quarter were 4.9603 million, including 4.535 million connections for the Residential segment and 0.3713 million connections for the SMB segment. In the Residential segment, the subscriber count was 3.4055 million for Pay TV, 4.0462 million for Broadband and 2.5574 million for Telephony business. Average monthly revenue per user (ARPU) in the reported quarter was $140.2, up 1.5% year over year.

Guidance

Altice anticipates revenues to grow 2.5-3% year over year in 2018.

Zacks Rank

Altice USA has a Zacks Rank #4 (Sell). The company operates in the highly competitive U.S. pay-TV market with large rivals like Comcast Corp. CMCSA, Charter Communications Inc. CHTR and DISH Network Corp. DISH. While Charter Communications has a Zacks Rank #4, both Comcast and DISH Network carry a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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