Altice USA Inc released its first-quarter (Q1) financial results on May 2, 2024, revealing a mixed performance marked by revenue growth but net income losses. Despite challenges, the telecommunications giant is focusing on strategic investments to bolster its future growth prospects.
Altice USA Q1 Results Analysis
Altice USA reported total revenue of $2.3 billion for the first quarter (Q1)of 2024, slightly below estimates but still reflecting a year-over-year growth of 1.9%. However, the net income attributable to shareholders painted a different picture, with a loss of $21.2 million, contrasting sharply with the $25.9 million profit from the same quarter last year. This deviation was largely due to increased operating expenses and higher interest expenses.
Market Reaction to Altice USA Q1 Results
At the time of reporting, Altice USA’s stock (ATUS) saw a positive reaction, with a 5.09% increase in value, trading at $2.155 per share.
Operational Highlights
Altice USA’s focus on enhancing customer profitability was evident in the quarter, with Residential Revenue per user (ARPU) increasing slightly to $135.67. Business Services Revenue showed modest growth, particularly in Lightpath revenue, although there was a decline in the SMB sector. News and Advertising Revenue also saw a notable increase, excluding political advertising revenue.
Strategic Initiatives and Customer Metrics
The company’s strategic initiatives aimed at improving network quality and customer service yielded positive results. Altice USA reported an 88% increase in total fiber customers, with Optimum’s fiber network penetration reaching 14.2%. Mobile services also experienced significant growth, with a 29k net addition in mobile lines.
Efforts to enhance operational efficiency resulted in a reduction of approximately 1.7 million inbound calls and around 235k fewer truck rolls year-over-year, streamlining operations and improving the customer experience.
Financial Stability and Outlook
Despite revenue growth and positive operational metrics, Altice USA’s financial stability is under scrutiny due to its consolidated net debt of $24.458 billion, representing a net leverage of 7.0x L2QA. However, the company has shown commitment to managing its debt effectively through refinancing and debt maturity management.
Altice USA reported an increase in Operating Free Cash Flow by 78.8% year-over-year, although Free Cash Flow remained modest at $63.6 million. Looking ahead, the company plans to invest approximately $1.6 billion to $1.7 billion in growth initiatives for the full year of 2024, emphasizing the importance of these investments for long-term growth and competitiveness.
The Q1 results of Altice USA reflect a period of strategic realignment and operational adjustments amid financial challenges. Despite reporting net income losses, the company demonstrated revenue growth and positive operational metrics, signaling potential future profitability. Strategic investments in network quality and customer service are crucial for Altice USA’s competitiveness and long-term growth in the telecommunications sector.
