On May 2, 2024, Altice USA Inc (ATUS, Financial) released its 8-K filing, detailing the financial results for the first quarter ended March 31, 2024. The company reported a total revenue of $2.3 billion, slightly underperforming against the estimated $2.238 billion, marking a year-over-year decrease of 1.9%. Notably, the net income attributable to shareholders showed a loss of $21.2 million, a significant deviation from the estimated net income of $3.13 million, and a stark contrast to the $25.9 million profit reported in the same quarter of the previous year.
Altice USA, a major player in the U.S. telecommunications sector, operates through its Optimum brand, providing services predominantly in the New York City metro area and smaller markets across the United States. The company also owns News 12 Networks and i24News, enhancing its media and content delivery capabilities.
Operational and Financial Highlights
The first quarter saw Altice USA focusing on enhancing customer profitability, evidenced by a slight increase in Residential Revenue per user (ARPU) to $135.67. Business Services Revenue modestly grew by 0.3% year-over-year, with notable growth in Lightpath revenue by 3.6%. However, the company faced challenges in the SMB sector, witnessing a decline of 0.8%. News and Advertising Revenue increased by 7.1%, excluding political advertising revenue, which grew by 1.8% year-over-year.
Despite these gains, Altice USA reported a net loss, primarily attributed to a decrease in operating income and higher interest expenses, which surged to $437.1 million from $389.3 million year-over-year. The company's strategy to manage its debt was evident with significant activities in refinancing and managing debt maturities effectively.
Strategic Initiatives and Customer Metrics
Altice USA's strategic initiatives aimed at improving network quality and customer service are showing positive signs. The company reported an 88% increase in total fiber customers, with Optimum's fiber network reaching a penetration rate of 14.2%. Mobile services also saw substantial growth, with a 29k net addition in mobile lines, marking a significant year-over-year increase.
The company's focus on operational efficiency resulted in approximately 1.7 million fewer inbound calls and around 235k fewer truck rolls year-over-year. These improvements are part of Altice USA's broader strategy to enhance customer experience and streamline operations.
Financial Stability and Outlook
Altice USA's financial stability is under scrutiny with a consolidated net debt of $24.458 billion, representing a net leverage of 7.0x L2QA. The company's cash flow situations present a mixed picture, with a notable increase in Operating Free Cash Flow by 78.8% year-over-year, yet a modest Free Cash Flow of $63.6 million.
Looking ahead, Altice USA anticipates continued investment in growth initiatives, with expected cash capital expenditures of approximately $1.6 billion to $1.7 billion for the full year of 2024. These investments are crucial for sustaining long-term growth and improving the robustness of Altice USA's service offerings.
Conclusion
Altice USA's first quarter of 2024 reflects a period of strategic realignment and operational adjustments amid financial challenges. While the company faces headwinds with its financial performance, particularly the net income losses, its ongoing investments in network quality and customer service improvements are laying the groundwork for potential future profitability and market competitiveness.
For detailed insights and further information, readers are encouraged to refer to the full 8-K filing by Altice USA Inc.
Explore the complete 8-K earnings release (here) from Altice USA Inc for further details.
