As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the cable and satellite industry, including Sirius XM (NASDAQ:SIRI) 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 Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was 1.9% below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the cable and satellite stocks have fared somewhat better than others, they collectively declined, with share prices falling 1.8% on average since the previous earnings results.
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 $2.16 billion, flat year on year, topping analysts' expectations by 1.4%. It was a mixed quarter for the company: Sirius XM slightly topped analysts' revenue expectations thanks to better-than-expected advertising revenue. On the other hand, its core subscribers churned and its full-year revenue guidance fell short of Wall Street's estimates.
Sirius XM scored the biggest analyst estimates beat of the whole group. The stock is down 14.8% since the results and currently trades at $2.71.
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Best Q1: 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 $30.06 billion, up 1.2% year on year, in line with analysts' expectations. It was a mixed quarter for the company: Revenue came in slightly ahead of Wall Street's estimates and adjusted EBITDA slightly below. The all-important volume metric of domestic broadband subscribers was in line with expectations.
Comcast delivered the fastest revenue growth among its peers. The stock is down 4.5% since the results and currently trades at $38.35.
Weakest Q1: 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 $404.3 million, down 4.2% year on year, falling short of analysts' expectations by 1%. It was a weak quarter for the company, with a miss of analysts' earnings estimates.
Cable One had the weakest performance against analyst estimates in the group. The stock is down 12% since the results and currently trades at $348.65.
Altice (NYSE:ATUS) Based in Long Island City, Altice USA (NYSE:NYSE:ATUS) is a telecommunications company offering cable, internet, telephone, and television services across the United States.
Altice reported revenues of $2.25 billion, down 1.9% year on year, in line with analysts' expectations. It was a weak quarter for the company, with a miss of analysts' earnings and operating margin estimates.
The stock is flat since the results and currently trades at $2.04.
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 $13.68 billion, flat year on year, falling short of analysts' expectations by 0.5%. It was a slower quarter for the company, with a miss of analysts' earnings estimates.
The stock is up 13.8% since the results and currently trades at $295.35.
