Altice Quarterly Financials Get Boost From U.S. Cable Operations
"The team is executing exceptionally well here," says Altice USA CEO Dexter Goei.
Altice Group, the European cable and telecom giant that last year acquired Cablevision Systems in a $17.7 billion deal and also controls smaller U.S. cable operator Suddenlink, on Thursday reported improved fourth-quarter financials, boosted by its U.S. business.
Altice's total quarterly revenue rose 2.7 percent to 6.09 billion euros ($6.43 billion). The company's U.S. operation Altice USA, which is led by CEO Dexter Goei and which has said it could launch an initial public offering, outperformed that, reporting a 5.1 percent revenue improvement in the fourth quarter, up from 1.2 percent in the year-ago period. That was driven by a 6.7 percent gain at Suddenlink and 4.4 percent growth in the former Cablevision markets, now known under the Optimum brand.
Altice's fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization jumped 15.7 percent to 2.29 billion euros ($2.42 billion) "driven by the strong growth of Altice USA," the company said. It reported a 40.6 percent increase for Optimum and a 17.4 percent gain at Suddenlink.
"The team is executing exceptionally well here," Goei said Thursday on an earnings call.
Asked about a target of $900 million in cost savings from the U.S. operations, Goei replied: "We feel very comfortable with our mid-term targets," saying that the firm has achieved 50 percent or more of those targets already. He added that "the lower-hanging fruit, easy wins" have been higher than the 30 percent of the overall mid-term targets his team had assumed. Goei concluded: "We feel very good about our ability to achieve our medium-term targets and hopefully exceed them."
Despite a number of skinny and digital pay TV bundle launches, the company has not seen "a meaningful change in the behavior of our clients today," said the exec.
Optimum lost 15,000 video subscribers in the fourth quarter, compared with a year-ago loss of 10,000, but added 15,000 broadband users, compared with 24,000.
Suddenlink reported 9,000 video subscriber losses in the latest quarter, compared with a loss of 1,000 in the year-ago period, and 19,000 broadband user additions, compared with 21,000.
Altice USA expects to launch a new home entertainment hub in the second quarter "to enhance the attractiveness of the video product."
Said Altice Group CEO Michel Combes: "2016 was a pivotal year for Altice as we successfully transformed the group into a leading, transatlantic converged communications player. Our business is stronger than ever and we have put all the building blocks in place for continued profitable growth. Our 2016 performance has validated the Altice model as we've been very focused on execution, seeing an advanced turnaround in Europe and stronger U.S. performance."
On an earnings conference call on Thursday, Combes said: “We love the U.S. market.” Altice was founded by billionaire Patrick Drahi.