As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the cable and satellite industry, including Charter (NASDAQ:CHTR) and its peers.
The massive physical footprints of fiber in the ground or satellites in space make it challenging for companies in this industry to adjust to shifting consumer habits. Over the last decade-plus, consumers have ‘cut the cord’ to their traditional cable subscriptions in favor of streaming options. While that is a headwind, this affinity to streaming means more households need high-speed internet, and companies that successfully serve customers can enjoy high retention rates and pricing power since the options for internet connectivity in any geography is usually limited.
The 6 cable and satellite stocks we track reported a weaker Q2. As a group, revenues missed analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was in line.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation, and while some cable and satellite stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.7% since the latest earnings results.
Best Q2: Charter (NASDAQ:CHTR) Operating as Spectrum, Charter (NASDAQ:CHTR) is a leading telecommunications company offering cable television, high-speed internet, and voice services across the United States.
Charter reported revenues of $13.69 billion, flat year on year. This print was in line with analysts’ expectations, and overall, it was a good quarter for the company with a decent beat of analysts’ earnings estimates.
"We are executing well on several transformational initiatives, growing EBITDA through efficiencies, and improving our service and sales capabilities," said Chris Winfrey, President and CEO of Charter.
Charter scored the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 12% since reporting and currently trades at $352.80.
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WideOpenWest (NYSE:WOW) Initially started in Denver as a cable television provider, WideOpenWest (NYSE:WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.
WideOpenWest reported revenues of $158.8 million, down 8% year on year, in line with analysts’ expectations. It performed better than its peers, but it was unfortunately a mixed quarter for the company with a decent beat of analysts’ earnings estimates but a miss of analysts’ subscribers estimates.
The market seems content with the results as the stock is up 4.1% since reporting. It currently trades at $5.37.
Weakest Q2: Cable One (NYSE:CABO) Founded in 1986, Cable One (NYSE:CABO) provides high-speed internet, cable television, and telephone services, primarily in smaller markets across the United States.
Cable One reported revenues of $394.5 million, down 7% year on year, falling short of analysts’ expectations by 1.3%. It was a weak quarter for the company with a miss of analysts’ earnings estimates.
Cable One posted the weakest performance against analyst estimates in the group. As expected, the stock is down 8.7% since the results and currently trades at $367.69.
Sirius XM (NASDAQ:SIRI) Known for its commercial-free music channels, Sirius XM (NASDAQ:SIRI) is a broadcasting company that provides satellite radio and online radio services across North America.
Sirius XM reported revenues of $2.18 billion, down 3.2% year on year, in line with analysts’ expectations. More broadly, it was a mixed quarter for the company with a decent beat of analysts’ earnings estimates but full-year revenue guidance missing analysts’ expectations.
The stock is down 12.3% since reporting and currently trades at $3.03.
Comcast (NASDAQ:CMCSA) Formerly known as American Cable Systems, Comcast (NASDAQ:CMCSA) is a multinational telecommunications company offering a wide range of services.
Comcast reported revenues of $29.69 billion, down 2.7% year on year, falling short of analysts’ expectations by 1.1%. Revenue aside, it was a weak quarter for the company with a miss of analysts’ earnings estimates.
The stock is flat since reporting and currently trades at $39.36.
This content was originally published on Stock Story
