Acquisitions Help Soften the Blow for Altice USA in Q2
Altice USA’s recent acquisition of a regional fiber-optic broadband service provider helped offset organic customer losses in the second quarter, as revenue rose 1.7% to $2.52 billion and cash flow growth was flat at $1.1 billion in the second quarter.
Altice said unique customer relationships were down by 12,000 in the period, but showed a gain of 23,000 unique customers when 35,000 subscribers from its most recent acquisition -- Morris Broadband -- is included. Altice USA purchased Morris broadband in April in a deal that valued the North Carolina company at $310 million.
Organic broadband subscriber growth was flat in the period, but increased to a gain of 30,000 customers when Morris Broadband data was included. That compares to a gain of 70,000 broadband subscribers in the prior year.
The same held true for video customer losses -- down 48,000 organically in Q2, or 36,000 when Morris Broadband’s 12,000 video customers are considered. Altice USA lost 35,000 video subscribers in Q2 2020.
Also Read: Analysts Brace for Broadband Slowdown
Residential revenue growth was spurred by a 7.8% rise in broadband sales and a 36.4% spike in News & Advertising revenue, supported by a strong recovery in local, regional and national advertising plus additional political advertising revenue from the New York mayoral and New Jersey gubernatorial races.
At its Optimum Mobile service -- which was rebranded earlier this month -- revenue rose 4% to $20.7 million as the company added 5,000 new customers. Optimum mobile ended the period with 180,000 customers, reaching about 3.8% of Altice USA’s residential customer base.
Altice USA said that broadband-only customer usage averaged about 558 Gigabytes per month in Q2, a 26% increase and that the average broadband speed taken by customers has nearly doubled over the past three years to 316 Megabits per second in Q2. More than half of its broadband customers subscribe to speeds of 200 Mbps or less, representing an opportunity to upsell to faster service, the company said.
Altice USA said it continues with its fiber-to-the-home upgrade plans, adding that at the end of the quarter it covered about 1.1 million homes with FTTH technology available for service. FTTH sell-in to new customers is at about two-thirds of net additions in areas where the technology is available, the company said. Penetration of FTTH passings grew to 4.3% compared to 1.0% in Q2 2020.
Altice said it also is moving forward with its edge-out program, adding 127,000 homes passed in the quarter (39k homes passed excluding Morris Broadband) and 315,000 homes passed in the past twelve months (160,000 homes passed excluding the acquisitions of Morris Broadband and Service Electric Cable T.V. of New Jersey).
“As the states and businesses in which we operate have been reopening more widely, Altice USA has seen an acceleration in revenue growth led by advertising and business services,” CEO Dexter Goie said in a press release. “Our residential business remains extremely focused on achieving faster broadband customer growth going forward from a faster pace of footprint expansion and network upgrades including fiber. We are delighted to have announced recently the new Optimum Mobile brand as the first step in the company’s plan to align all its connectivity brands under one national Optimum brand, and we continue to invest in innovative new products such as Optimum Stream to support increased video streaming activity which is driving broadband data usage.”
Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.
Altice USANYSE:ATUS Stock Report
Altice USA Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$17.38|
|52 Week High||US$17.14|
|52 Week Low||US$38.30|
|1 Month Change||-32.24%|
|3 Month Change||-47.67%|
|1 Year Change||-39.29%|
|3 Year Change||-3.87%|
|5 Year Change||n/a|
|Change since IPO||-46.87%|
Recent News & UpdatesSep 24
Altice USA: Now A Turnaround Play With Low-Teens Free Cash Flow Yield
ATUS stock lost 12.7% on Thursday after negative management comments at a conference call the investment case into question. ATUS now expects 15-20k of broadband net losses in Q3, which is blamed on lower gross adds, while churn supposedly has not worsened. We believe ATUS's issues are company-specific and due to poor execution; it is now in a turnaround, and we think this will succeed. We have revised our forecasts significantly downwards, incorporating expectations of higher CapEx and lower buybacks. With shares at $22.06, we expect a total return of 59% (14.7% annualized) if the stock merely returns to its summer 2021 level. Buy.
Plugging Into The Altice Bull Case
Altice has massively trailed peers so far this year. Management has not done themselves any favors. From a quixotic quest to buy Atlantic Broadband to forecasts that showed no handle on the business. Still, the company is much cheaper than peers, gushing cash flow, and buying back shares hand over fist.
|ATUS||US Media||US Market|
Return vs Industry: ATUS underperformed the US Media industry which returned 25.2% over the past year.
Return vs Market: ATUS underperformed the US Market which returned 27.6% over the past year.
Stable Share Price: ATUS is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.
Volatility Over Time: ATUS's weekly volatility (7%) has been stable over the past year.
About the Company
Altice USA, Inc., together with its subsidiaries, provides broadband communications and video services in the United States, Canada, Puerto Rico, and the Virgin Islands. It offers broadband, video, telephony, and mobile services to approximately 5 million residential and business customers. The company’s video services include delivery of broadcast stations and cable networks; over the top services; video-on-demand, high-definition channels, digital video recorder, and pay-per-view services; and platforms for video programming through mobile applications.
Altice USA Fundamentals Summary
|ATUS fundamental statistics|
Earnings & Revenue
|ATUS income statement (TTM)|
|Cost of Revenue||US$3.32b|
Last Reported Earnings
Jun 30, 2021
|Earnings per share (EPS)||1.74|
|Net Profit Margin||8.00%|
How did ATUS perform over the long term?See historical performance and comparison
Is Altice USA undervalued compared to its fair value and its price relative to the market?
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: ATUS ($17.38) is trading below our estimate of fair value ($48.29)
Significantly Below Fair Value: ATUS is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: ATUS is good value based on its PE Ratio (10x) compared to the US Media industry average (15x).
PE vs Market: ATUS is good value based on its PE Ratio (10x) compared to the US market (18.2x).
Price to Earnings Growth Ratio
PEG Ratio: ATUS is poor value based on its PEG Ratio (1.6x)
Price to Book Ratio
PB vs Industry: ATUS has negative assets, so we can't compare its PB Ratio to the US Media industry average.
How is Altice USA forecast to perform in the next 1 to 3 years based on estimates from 29 analysts?
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ATUS's forecast earnings growth (6.2% per year) is above the savings rate (2%).
Earnings vs Market: ATUS's earnings (6.2% per year) are forecast to grow slower than the US market (15.1% per year).
High Growth Earnings: ATUS's earnings are forecast to grow, but not significantly.
Revenue vs Market: ATUS's revenue (2% per year) is forecast to grow slower than the US market (9.9% per year).
High Growth Revenue: ATUS's revenue (2% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: ATUS's Return on Equity is forecast to be very high in 3 years time (160.8%).
How has Altice USA performed over the past 5 years?
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ATUS has high quality earnings.
Growing Profit Margin: ATUS's current net profit margins (8%) are higher than last year (1.9%).
Past Earnings Growth Analysis
Earnings Trend: ATUS has become profitable over the past 5 years, growing earnings by 28.6% per year.
Accelerating Growth: ATUS's earnings growth over the past year (324.3%) exceeds its 5-year average (28.6% per year).
Earnings vs Industry: ATUS earnings growth over the past year (324.3%) exceeded the Media industry 96.3%.
Return on Equity
High ROE: ATUS's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.
How is Altice USA's financial position?
Financial Position Analysis
Short Term Liabilities: ATUS has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.
Long Term Liabilities: ATUS has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.
Debt to Equity History and Analysis
Debt Level: ATUS has negative shareholder equity, which is a more serious situation than a high debt level.
Reducing Debt: ATUS's has negative shareholder equity, so we do not need to check if its debt has reduced over time.
Debt Coverage: ATUS's debt is not well covered by operating cash flow (10.9%).
Interest Coverage: ATUS's interest payments on its debt are not well covered by EBIT (2x coverage).
What is Altice USA current dividend yield, its reliability and sustainability?
Dividend Yield vs Market
Notable Dividend: Unable to evaluate ATUS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate ATUS's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if ATUS's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if ATUS's dividend payments have been increasing.
Current Payout to Shareholders
Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: No need to calculate the sustainability of ATUS's dividend in 3 years as they are not forecast to pay a notable one for the US market.
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Mr. Dexter G. Goei is Non-Independent Non-Executive Director at Teads B.V. since 2021. He is the Chief Executive Officer and Director of Altice USA since 2016. Mr. Goei was the Chairman of ltice USA since...
CEO Compensation Analysis
Compensation vs Market: Dexter's total compensation ($USD48.02M) is above average for companies of similar size in the US market ($USD6.27M).
Compensation vs Earnings: Dexter's compensation has increased by more than 20% in the past year.
Experienced Management: ATUS's management team is considered experienced (2.3 years average tenure).
Experienced Board: ATUS's board of directors are considered experienced (3.8 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Altice USA, Inc.'s employee growth, exchange listings and data sources
- Name: Altice USA, Inc.
- Ticker: ATUS
- Exchange: NYSE
- Founded: 2015
- Industry: Cable and Satellite
- Sector: Media
- Market Cap: US$7.945b
- Shares outstanding: 457.13m
- Website: https://www.alticeusa.com
Number of Employees
- Altice USA, Inc.
- 1 Court Square West
- Long Island City
- New York
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2021/10/17 22:05|
|End of Day Share Price||2021/10/15 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.
For this company's predecessor, see Cablevision.
American telecommunications and media company; spin-off of Altice Europe
Altice USA, Inc., commonly known as Altice, is an American cable television provider with headquarters in New York City. It delivers pay television, Internet access, telephone services, and original television content to approximately 4.9 million residential and business customers in 21 states.
As a multiple-systems operator, the company operates the Optimum and Suddenlink brands, which it plans to rebrand under the Altice name. The company also provides international news through the February 2017 U.S. launch of i24NEWS and local news through News 12 Networks.
With its combined brands, Altice USA is the fourth-largest cable provider in the U.S., having customers residing in the New York City tri-state area, as well as several midwestern and southern states.
In November 2016, Altice USA announced a five-year plan for fiber-to-the-home to build a network capable of delivering 10 Gbit/s broadband speed. In August 2017, the company stated it was on track to reach one million homes by the end of 2018.
In June 2017, Altice USA raised US$2.2 billion in an initial public stock offering.
Altice USA is based at One Court Square in Long Island City, Queens with its operational center located at Cablevision's former headquarters in Bethpage, New York.
Products and services
- Optimum Online, a DOCSIS Internet service that offers speeds up to 940 Mbit/s. As of April 2020, a Fiber-to-the home service is available to more than half of its service footprint.
- Subscribers also get access to Optimum Wi-Fi hotspots that are located within the Altice's service area. Additionally, they may also connect to hotspots provided by Charter Spectrum, Comcast and Cox nationwide.
- Optimum Voice, a Voice over IP (VoIP) telephone service
- Optimum TV, a digital cable service
- Suddenlink Internet, an Internet service that offers speeds up to 940 Mbit/s
- Suddenlink Home Phone, a Voice over IP (VoIP) telephone service
- Suddenlink Television, a digital cable service
- Altice Mobile, a wireless network offering unlimited text, talk, and data over a 4G LTE nationwide network;
- Altice Business (Built of the former Lightpath, Optimum Business, and Suddenlink Business organizations), an internet, telephone, and television service for businesses. Altice Business is currently available in 21 state and serves more than 375,000 businesses.
- News 12 Networks, a group of cable networks that provide news, weather, traffic and sports to cable subscribers in the New York/New Jersey/Connecticut tri-state area through seven individual 24-hour local news channels and five traffic and weather channels.
- News 12 Varsity
- Audience Partners, a provider of audience-based digital advertising solutions, which Altice USA acquired in March 2017.
- Cheddar, a live-streaming financial news network, which Altice USA acquired in 2019.
On May 20, 2015, Netherlands-based Altice NV announced that it would enter the U.S. cable market by purchasing Suddenlink Communications, the country's 7th-largest cable provider, for $9.1 billion. The acquisition closed on December 21, 2015.
On September 17, 2015, Altice NV announced its intention to acquire Cablevision from the Dolan family and other public shareholders for $17.7 billion. The deal was approved by the FCC on May 3, 2016 and after approval from various regional regulators such as New Jersey's Board of Public Utilities and the New York Public Service Commission, closed on June 21, 2016. Under the terms of the deal, Altice paid $34.90 in cash for each share in Cablevision and a 22% premium to the company's stock price; Altice also assumed Cablevision's debt. Prior to this, Altice had already acquired St. Louis-based Suddenlink Communications, and both companies became subsidiaries of Altice USA.
In May 2017, Altice USA announced its intention to rebrand its Suddenlink and Cablevision properties under the Altice name by the end of the second quarter of 2018.
In June 2017, Altice USA went public, raising $2.2 billion in its initial public offering.
On January 8, 2018, Altice NV announced that it will spin-off Altice USA into a separate company. Patrick Drahi will maintain control of both companies, although they will be led by separate management teams.
On April 30, 2019, it was announced Altice USA was buying Cheddar for $200 million in cash.
On February 14, 2020, Altice USA announced that it has bought Service Electric Broadband Cable in New Jersey. The deal closed in July.
The company provides service in 4 states: Connecticut, New Jersey, New York, and Pennsylvania mainly along the Atlantic Ocean.
See also: Carriage disputes
AMC Networks dispute
Altice engaged in a carriage dispute with the Dolan family (the former owners of Cablevision). Altice's contract to carry AMC Networks group of channels was to expire on December 31, 2016. On December 28 the two sides reached an agreement, three days before their contract with AMC expired.
The Walt Disney Company dispute
Altice engaged in a dispute with The Walt Disney Company; the contract to carry the company's channels was set to expire on October 1, 2017.
On October 1, 2017, Disney and Altice reached a last-minute agreement to continue carrying the company's channels; this narrowly averted what would have been a blackout of ABC-owned stations WABC-TV and WPVI-TV, along with the ESPN family of networks and various other channels. As part of the agreement, ESPN Classic was removed from the Altice lineup.
On January 1, 2018, Altice dropped Starz, Starz Encore, and all of their channels from its channel lineup. The dispute came after the companies were unable to reach an agreement. The dispute ended on February 13, 2018 after both companies reached a new multi-year agreement.
21st Century Fox dispute
On September 22, 2018, 21st Century Fox announced that all of its entertainment and sports channels, including Fox owned-and-operated station WNYW and MyNetworkTV O&O WWOR-TV, would be removed from Altice on October 1 if a new retransmission agreement was not reached by that date.
- ^Keslassy, Elsa (2017-06-22). "Cable Operator Altice USA Raises $1.9 Billion in IPO". Variety. Retrieved 2017-09-28.
- ^ ab"Altice USA CEO Goei Thinks Ahead to M&A on First Day of Trading". Bloomberg.com. 2017-06-21. Retrieved 2017-09-28.
- ^"Altice Launching News Network i24 in U.S. in February". The Hollywood Reporter. Retrieved 2017-10-01.
- ^"U.S. FCC approves Altice acquisition of cable firm Suddenlink". Reuters. 2015-12-18. Retrieved 2017-09-28.
- ^"Altice USA to Skip DOCSIS 3.1, Roll Out All-Fiber Network | Multichannel". www.multichannel.com. 30 November 2016. Retrieved 2017-10-02.
- ^"Altice says it will reach 1M new homes with fiber by end of 2018 | FierceCable". www.fiercecable.com. Retrieved 2017-10-02.
- ^ ab"Altice USA IPO raised $2.2 billion in final tally". News Day. June 27, 2017. Retrieved November 2, 2017.
- ^"One Gigabit Broadband Speeds Now Available to Millions of Optimum Customers Across New York, New Jersey, and Connecticut". Altice USA. 2020-04-30. Retrieved 2020-08-02.
- ^Farrell, Mike (2019-09-05). "Altice USA Launches Wireless Service". Multichannel. Retrieved 2019-10-08.
- ^"Altice USA Forms Business Unit". Multichannel. Retrieved 2018-10-25.
- ^"About Us: Ethernet Services & Solutions Provider - Lightpath". golightpath.com.
- ^"Patrick Dolan and Altice USA Enter into Agreement for Newsday Media Group". Businesswire.com. 2016-07-07. Retrieved 2017-11-12.
- ^"Cablevision". 16 February 2010. Archived from the original on 16 February 2010.
- ^"Cable giant buys Philly ad targeter Audience Partners". Philly.com. 2017-03-08. Retrieved 2017-11-05.
- ^"Altice enters U.S. cable market with Suddenlink move". Reuters.com. 2015-05-20. Retrieved 2017-11-07.
- ^"ltice Closes Suddenlink Deal". Multichannel.com. 2015-12-21. Retrieved 2017-11-07.
- ^"Altice and Cablevision, WC Docket 15-257". Federal Communications Commission. 2015-12-04. Retrieved 2016-06-22.
- ^"Altice Completes Acquisition of Cablevision Systems Corporation"(PDF). Altice NV. June 21, 2016.
- ^Emily Steel; Mark Scott (September 17, 2015). "Expanding in U.S., Altice Plans to Buy Cablevision for $17.7 Billion". The New York Times. Retrieved September 17, 2015.
- ^"Suddenlink and Optimum brands to disappear amid Altice rebrand". Fierce Cable. May 24, 2017. Retrieved 2017-10-10.
- ^Rosemain, Mathieu; Athavaley, Anjali (8 January 2018). "Drahi hits Altice reset button to court wary investors". Reuters. Retrieved 11 January 2018.
- ^"Altice USA Buys Digital News Service Cheddar for $200M". 30 April 2019.
- ^Farrell, Mike (February 12, 2020). "Altice to Buy Service Electric New Jersey Systems for $150M". Multichannel News. Retrieved July 22, 2020.
- ^"Service Electric to be acquired by NYC-based Altice cable".
- ^"Goodbye Service Electric: Altice USA closes acquisition of utility".
- ^"Altice USA, AMC Networks Reach Carriage Deal | Multichannel". www.multichannel.com. Retrieved 2017-01-01.
- ^Renshaw, Jarrett (24 September 2017). "Walt Disney threatens to pull ESPN, ABC from Optimum". reuters. Retrieved 16 November 2020.[dead link]
- ^"David Faber on Twitter".
- ^"Starz goes dark on Altice in first big carriage battle of 2018 - FierceCable". www.fiercecable.com.
- ^Littleton, Cynthia (September 22, 2018). "Fox Networks Group, Altice USA Rattle Sabers in New York Carriage Fight". Variety. Retrieved September 28, 2018.
Revenue for Altice USA (ATUS)
Altice USA, Inc., or simply Altice, is an American cable television provider that delivers pay television, Internet access, telephone services, and original television content to approximately 4.9 million customers. The company operates the Optimum and Suddenlink brands.
Revenue in 2021 (TTM): $9.96 B
According to Altice USA 's latest financial reports the company's current revenue (TTM) is $9.96 B. In 2020 the company made a revenue of $9.89 B an increase over the years 2019 revenue that were of $9.76 B.The revenue is the total amount of income that a company generates by the sale of goods or services. Unlike with the earnings no expences are substracted.
Revenue history for Altice USA from 2016 to 2021
|2021 (TTM)||$9.96 B||0.7%|
Revenue altice usa
Altice USA Posts Higher 2Q Profit as Revenue Increases
By Kimberly Chin
Altice USA Inc. said profit rose in the second quarter on higher revenue driven by advertising and business services.
The cable television company's profit was $197.7 million, compared with $111.5 million in the year-ago quarter. Per-share earnings were 43 cents, up 19 cents a year earlier. Analysts on average expect a profit of 47 cents a share, according to FactSet.
Total revenue was $2.52 billion, up from $2.47 billion in the same quarter a year earlier. Analysts expected $2.51 billion in revenue. Broadband revenue increased 7.8% to $992.2 million. Video and telephony revenue slipped from last year's second quarter.
"We continue to invest in innovative new products such as Optimum Stream to support increased video streaming activity which is driving broadband data usage," said Chief Executive Officer Dexter Goel in prepared remarks.
Write to Kimberly Chin at [email protected]
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