Altice USA, Inc. ATUS reported soft second-quarter 2024 results, with both the top and bottom lines missing the Zacks Consensus Estimate. The company reported a revenue decline year over year, owing to soft demand trends in the Residential, News and Advertising segments. However, growth in mobile line and fiber customer net additions, focus on network upgrades, improving customer care, AI integration and financial discipline were the positives.

Bottom Line

Altice reported a net income of $15.4 million or 3 cents per share compared to $78.3 million or 17 cents per share in the prior-year quarter. The sharp year-over-year decline was due to top-line contraction and higher interest expenses. The bottom line missed the Zacks Consensus Estimate by 5 cents.

Altice USA, Inc. Price, Consensus and EPS Surprise

Altice USA, Inc. price-consensus-eps-surprise-chart | Altice USA, Inc. Quote

Revenues

Total revenues in the quarter were $2.24 billion, down from $2.32 billion in the prior-year quarter. Lower net sales from broadband and video customers curtailed the top line. Revenues missed the consensus estimate by $10 million.

The company made progress in its growth strategies by accelerating network enhancement and customer experience. At the quarter-end, Altice had 2,842 million FTTH (fiber to the home) passings, about 62,000 of which were added in the April-June period.

Fiber net additions were about 40,000 in the quarter, led by increased migration of existing customers and higher fiber gross additions. Total fiber customers reached 434,000 by the end of the quarter. Residential average revenue per user (ARPU) declined to $135.95 from $137.44 a year ago. Despite greater mobile penetration, a stable churn rate and AI implementation across care and retention centers, losses of video subscribers, affected the ARPU.

Business services and wholesale revenues increased to $369.3 million from $364.7 million in the year-ago quarter. The improvement was driven by growth in Lightpath revenues. Net sales surpassed our estimate of $342.1 million.

News and Advertising revenues were $105.3 million, down from $113.5 million in the year-earlier quarter. Net sales missed our estimate of $116.6 million.

Residential revenues (which include Broadband, Video, Telephony and Mobile) were $1.75 billion, down from $1.83 billion in the year-earlier quarter, primarily due to the loss of higher ARPU video customers. Net sales missed our estimate of $1.78 billion.

Other Quarterly Details

Operating income increased to $501.6 million from $481.98 million in the year-ago quarter owing to lower operating expenses. Adjusted EBITDA was $867.2 million compared with $921.7 million in the prior-year quarter. Optimum Mobile witnessed healthy subscriber growth during the quarter, reaching 384,500 customers, representing a 5.8% penetration of the company’s total broadband customer base.

Altice’s total passings grew more than 67,000 and reached 9.7 million at the end of the quarter. The company is witnessing solid customer penetration, typically reaching approximately 40% within a year of rollout in new-build areas.