While cable company Altice USA (ATUS -3.30%) delivered quarterly results that topped analyst expectations for profitability, investors nevertheless traded out of the stock. Many were doing so on concerns about the company's all-important broadband-subscriber count and its plans for the future. Consequently, Altice USA's stock price took a hit of almost 18% on the day.
After market hours on Wednesday, Altice USA released its Q4 and full-year 2021 earnings. These revealed that the company earned revenue of $2.52 billion, representing a marginal decline over the year-ago quarter. GAAP net income experienced a steeper fall, sliding by 24% to just under $252 million ($0.56 per share).
The top-line figure met the average analyst estimate. Those prognosticators, however, were collectively expecting a per-share net profit of only $0.51 per share.
Investors were more likely fixated on the decline in customers of residential broadband, a key revenue generator for the company. The former count fell by roughly 2,000, exacerbating a loss of approximately 4,000 in Q4 2020. All told, total residential revenue for Altice USA fell by 2%, and a 12% rise in the company's business services couldn't compensate for that decline.
Altice USA hopes to get the growth train moving again with bundled services and a more robust broadband product.
"We see customer trends improving as we continue the expansion of our sales distribution channels and recently launched our planned competitive converged internet and mobile offerings.," the company quoted CEO Dexter Goei as saying.
The company added that it plans to offer 100% fiber internet to its clients, rolling it out to reach two-thirds of its geographic footprint within four years. A much faster online experience will certainly be attractive and very competitive, but fiber networks are neither cheap nor easy to build out. Investors are likely wary of the time and expense that will surely be required to hit this lofty goal.