Looking back on cable and satellite stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including WideOpenWest (NYSE:WOW) 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 slower 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.
While some cable and satellite stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.8% since the latest earnings results.
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. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ operating margin estimates.
"We made substantial progress throughout the quarter, growing our presence in Greenfield markets while continuing to stabilize our subscriber numbers in our legacy footprint," said Teresa Elder, WOW!'s CEO.
WideOpenWest delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 3.3% since reporting and currently trades at $5.33.
Read our full report on WideOpenWest here, it’s free.
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 achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 3.6% since reporting. It currently trades at $326.20.
Is now the time to buy Charter? Access our full analysis of the earnings results here, it’s free.
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.
Cable One delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 12.3% since the results and currently trades at $353.56.
Read our full analysis of Cable One’s results here.
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 number missed analysts’ expectations by 1.1%. Overall, it was a mixed quarter for the company.
The stock is up 5.3% since reporting and currently trades at $41.64.
Read our full, actionable report on Comcast here, it’s free.
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 was in line with analysts’ expectations. More broadly, it was a slower quarter as it also logged a decent beat of analysts’ earnings estimates but full-year revenue guidance missing analysts’ expectations.
The stock is down 29.5% since reporting and currently trades at $24.35.
Read our full, actionable report on Sirius XM here, it’s free.
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