Optimum Cable Owner Falls After Cutting Subscriber Forecast
Altice USA Tumbles After Forecasting Drop in Broadband Customers
(Bloomberg) -- Altice USA Inc., which sells broadband service under the Optimum brand, fell as much as 8% in New York after its chief executive officer said the company expects to lose 15,000 to 20,000 broadband customers this quarter.
Chief Executive Officer Dexter Goei called the results “disappointing,” and “underwhelming” Thursday at a Goldman Sachs Group Inc. investor conference, citing severe weather, stricter regulation and weaker-than-expected results around the back-to-school season.
Selling internet service has been a bright spot for the cable industry during the pandemic, as people working and attending school at home have fueled demand for fast connections. Altice’s results stand in contrast to larger peers like Comcast Corp. and Charter Communications Inc., which continue to add internet subscribers at a rapid clip, partly by taking market share from phone companies.
Altice fell as low as $23.25, the steepest intraday drop since July 29, before recovering somewhat to $23.95. The stock had declined 33% this year through Wednesday.
The company, which had 4.4 million internet customers at midyear, also faces stiff competition for customers with Verizon Communications Inc. in Long Island. Analysts were forecasting that number would stay unchanged in the third quarter.
Earlier this month, Altice USA announced that Hakim Boubazine, its chief operating officer and president of its telecommunications unit, had resigned, with Goei assuming his responsibilities.
In a note earlier this month, Craig Moffett, an analyst at MoffettNathanson, said “there’s a lot to fret over” with Altice USA.
“We suspect that Altice has a broadband pricing problem,” Moffett said. “We’re not sure they can sustainably grow broadband subscribers.”
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