Altice USA (ATUS) - Get Altice USA, Inc. Class A Report shares dropped Thursday, after the cable and broadband provider’s CEO said it anticipates 15,000 to 20,000 broadband customers will ditch it this quarter.
The CEO, Dexter Goei, whose company offers service under the Optimum brand, called those numbers “disappointing,” and “underwhelming” at a Goldman Sachs investor conference cited by Bloomberg News.
He attributed the customer losses to bad weather, tighter government rules and weaker-than-expected sales during the back-to-school season.
Other cable companies, such as Comcast (CMCSA) - Get Comcast Corporation Class A Report and Charter Communications (CHTR) - Get Charter Communications, Inc. Class A Report have been able to blunt their losses of cable customers with gains of Internet customers.
Altice shares closed Thursday at $22.07, down 13%. The stock has stumbled 33% in the last three months, while Comcast stock has eased 3%, Charter has gained 5% and the S&P 500 has appreciated 4%
Morningstar analyst Michael Hodel put fair value at $36 for Altice in July. He wasn’t too impressed with the company’s second-quarter earnings report.
“Altice USA continued to struggle to grow its customer base during the second quarter, though management insists it hasn’t seen a meaningful change in the competitive environment,” Hodel wrote in a commentary.
“The firm backed off expectations that customer additions in 2021 will be comparable to or better than 2018 and 2019, though it still expects growth to pick up during the second half of the year and into 2022 as network initiatives bear fruit.”
Further, “total revenue increased 1.7% year over year, but this figure overstates the performance of the business somewhat,” Hodel said.