Moody’s turns Cable One view to negative

Moody’s Ratings said it changed its outlook for Cable One, Inc. to negative from stable and affirmed its ratings including the Ba2 senior secured credit facilities and B2 senior unsecured notes.

“The rating action reflects weakening operating performance with revenue and EBITDA both down in 2023, by 1.6% and .5%, respectively after many years of strong growth. The top-line declines are being driven primarily by the persistent decline in video subscribers which have high ARPU's, inflationary costs and near-flat broadband net adds are pressuring earnings, and free cash flows are down due primarily to higher interest costs. Leverage was 4.2x at the end of 2023,” Moody’s said in a statement.

The agency said it forecasts revenue and EBITDA could decline in the low single-digit range. However, EBITDA margins are expected to stay in the low 50% range, delivering EBITDA of at least $850 million to $875 million. Net of capex (falling to low to mid 20% of revenue) and interest (assuming a weighted average borrowing cost near 5%), Moody's estimates free cash flow of up to $225 million to $250 million.”

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