As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the wireless, cable and satellite industry, including Sirius XM (NASDAQ:) 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 9 wireless, cable and satellite stocks we track reported a mixed Q2. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Inflation progressed towards the Fed’s 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut’s timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Thankfully, wireless, cable and satellite stocks have been resilient with share prices up 5.6% on average since the latest earnings results.
Best Q2: 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 print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with full-year revenue guidance exceeding analysts’ expectations and a decent beat of analysts’ earnings estimates.
Unsurprisingly, the stock is down 21.3% since reporting and currently trades at $27.20.
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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.
The market seems content with the results as the stock is up 4.3% since reporting. It currently trades at $328.50.
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 11.1% since the results and currently trades at $358.
Verizon (NYSE:NYSE:)
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 result was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it also logged a narrow beat of analysts’ earnings estimates but a miss of analysts’ operating margin estimates.
Verizon pulled off the fastest revenue growth among its peers. The company lost 290,000 customers and ended up with a total of 144.5 million. The stock is up 5.2% since reporting and currently trades at $43.77.
AT&T (NYSE:T)
Founded by Alexander Graham Bell, AT&T (NYSE:T) is a multinational telecomm conglomerate providing a range of communications and internet services.
AT&T reported revenues of $29.8 billion, flat year on year. This result met analysts’ expectations. Zooming out, it was a mixed quarter as it also logged a narrow beat of analysts’ earnings estimates but a miss of analysts’ Mobility revenue estimates.
The stock is up 18.8% since reporting and currently trades at $21.65.
This content was originally published on Stock Story
