Company expects continued margin expansion and broadband performance improvement over time
Optimum to continue investing in fiber expansion, network upgrades and operational enhancements
Company maintains focus on cost discipline and simplifying operations to strengthen financial foundation
Overview
US broadband and video provider's Q2 revenue fell 5.8% yr/yr to $2.02 bln
Adjusted EBITDA declined 2.2% yr/yr, with margin expanding to 38.8%
Company posted wider net loss and completed $300 mln preferred unit sale, $300 mln share tender offer
Result drivers
Cost discipline - Co said margin expansion was driven by reduced operating expenses, including lower truck rolls, call volumes, sales acquisition costs and workforce optimization
Mobile growth - Co reported strongest second-quarter mobile line net additions, with mobile revenue up 40% yr/yr and penetration rising to 8.9% of broadband base
Video offerings - Migration to new tiered video packages improved retention and strengthened video margin profile
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 7 "hold" and 5 "sell" or "strong sell"
The average consensus recommendation for the integrated telecommunications services peer group is "buy"
Wall Street's median 12-month price target for Optimum Communications Inc is $1.10, about 40.3% above its August 5 closing price of $0.78
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