Video, voice, and data services provider Cable One (NYSE:CABO) reported its fourth-quarter results before the market opened on Feb. 28. Revenue grew on the strength of residential data and business services, but higher costs led to a decline in profit. Here's what investors need to know about Cable One's fourth-quarter results.

Cable One: The raw numbers


Q4 2016

Q4 2015

Year-Over-Year Change


$206.7 million

$203.4 million


Net income

$24.4 million

$26.1 million


Earnings per share




Data source: Cable One.

Cables going into the back of a server.

Image source: Getty Images.

What happened with Cable One this quarter?

Residential data and business services posted double-digit growth, mostly offset by declines in other segments.

  • Residential data revenue grew 12.9% year over year, to $87.9 million.
  • Business services revenue grew 14.2% year over year, to $26.6 million.
  • Residential video revenue slumped 7.5% to $72.1 million, residential voice revenue dropped 19.4% to $10.2 million, and advertising sales fell 16.4% to $7.4 million.
  • The number of homes passed reached 1.67 million at the end of 2016, up 1.6% compared with the end of 2015.
  • The total customer count was 657,000 thousand at the end of 2016, down 1.1%. The number of non-video customers surged 13.5% to 336,000, surpassing 50% of the total.
  • Average revenue per user (ARPU) increased for all segments except residential voice. Residential data showed the strongest increase, with ARPU rising 10.9% year over year to $62.64.
  • Adjusted EBITDA grew 0.7% year over year to $88.6 million.
  • Adjusted EBITDA less capital expenditures was $54.4 million, up 160.8% year over year.
  • Cable One announced the $735 million acquisition of NewWave Communications in January.

What management had to say

Cable One President and CEO Julie Laulis talked up the acquisition of NewWave Communications:

We are pleased with our annual results demonstrating top-line revenue growth and strong adjusted EBITDA and margin expansion. We are also excited about our recent announcement of the planned acquisition of NewWave Communications, which will allow us to utilize our financial capacity for an acquisition that should be accretive to shareholder value.

Looking forward

While revenue and adjusted EBITDA grew during the fourth quarter, the bottom line was knocked down by increases in SG&A and depreciation costs. Total operating expenses rose 5.2% year over year, leading to a 9% decline in operating income. Share buybacks helped boost per-share numbers, but it wasn't enough to prevent a drop in EPS.

Residential data and business services continued to grow during the fourth quarter, while the rest of Cable One's business shrank. The NewWave acquisition will add 214,000 residential primary service units and 31,000 business PSUs, bringing Cable One's total up to 1.2 million. Cable One expects to achieve $24 million in cost synergies from the deal, as well as $152 million in estimated tax benefits on a present-value basis. 

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