Looking back on wireless, cable and satellite stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Verizon (NYSE:VZ) and its peers.
The massive physical footprints of cell phone towers, 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 landlines and traditional cable subscriptions in favor of wireless communications and streaming video. These trends do mean that more households need cell phone plans and high-speed internet. Companies that successfully serve customers can enjoy high retention rates and pricing power since the options for mobile and internet connectivity in any geography are usually limited.
The 8 wireless, cable and satellite stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was in line.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
Wireless, Cable and Satellite stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
Verizon (NYSE:VZ)
Formed in 1984 as Bell Atlantic after the breakup of monopoly Bell System into seven companies, Verizon (NYSE:VZ) is a telecomm giant providing a range of communications and internet services.Verizon reported revenues of $32.8 billion, flat year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a narrow beat of analysts’ earnings estimates.
Verizon pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 3.5% since reporting and currently trades at $43.08.
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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, in line with analysts’ expectations. The business had a satisfactory quarter with a decent beat of analysts’ earnings estimates.
Charter scored the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 3.9% since reporting. It currently trades at $327.20.
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 softer quarter as it posted a miss of analysts’ earnings estimates and a miss of analysts’ operating margin estimates.
Cable One delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 15.8% since the results and currently trades at $339.37.
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. This print missed analysts’ expectations by 1.1%. Overall, it was a mixed quarter for the company.
The stock is up 4.4% since reporting and currently trades at $41.27.
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. This number met analysts’ expectations. Overall, it was a strong quarter as it also recorded full-year revenue guidance exceeding analysts’ expectations and a decent beat of analysts’ earnings estimates.
The stock is down 22.8% since reporting and currently trades at $26.66.
This content was originally published on Stock Story
