Will Top-Line Contraction Affect Altice (ATUS) Q4 Earnings?
Altice USA, Inc. ATUS is scheduled to report fourth-quarter 2022 results on Feb 22, after the closing bell. In the last reported quarter, the company delivered a negative earnings surprise of 44.12%. ATUS pulled off a trailing four-quarter earnings surprise of 3.7%, on average. The Long Island City, NY-based company will likely record year-over-year lower revenues induced by challenging macroeconomic environment, huge financial obligation and intense competition.
Factors at Play
During the fourth quarter, Lightpath announced its entry into the Miami market for fiber connectivity solutions with a 135-mile, all-fiber network throughout the Miami Metro region. The Miami region, the second-largest market on the east coast after Boston, is home to thriving business districts and a significant population of academics and the government. It is also regarded as the financial and technological gateway to Central and South America. Therefore, this project is highly significant to the company’s commercial expansion and long-term growth. Altice owns a 50.01% controlling interest in Lightpath. Hence this development is likely to cushion Altice’s top-line performance in the fourth quarter.
Intense competition from established players and increasing programming costs per customer due to higher contractual rates are hurting the operating margin. The global presence of Altice’s fiber network has exposed it to the risk of foreign exchange fluctuations. Also, a massive debt burden is limiting its growth potential.
For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $2,414 million, which indicates a decline of 4.2% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at 22 cents, suggesting a decline from the prior-year quarter’s reported figure of 56 cents.
Earnings Whispers
Our proven model does not predict an earnings beat for Altice in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at 22 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Altice USA, Inc. Price and EPS Surprise
Altice USA, Inc. price-eps-surprise | Altice USA, Inc. Quote
Zacks Rank: Altice has a Zacks Rank #4.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Splunk Inc. SPLK is set to release quarterly numbers on Mar 1. It has an Earnings ESP of +0.39% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for NICE Systems Ltd. NICE is +1.98% and it carries a Zacks Rank of 2. The company is set to report quarterly numbers on Feb 23.
The Earnings ESP for BeiGene BGNE is +4.19% and it carries a Zacks Rank of 2. The company is set to report quarterly numbers on Feb 24.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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