ATN International 2025 Q1 Earnings Misses Targets as Net Income Drops 43%

ATN International (ATNI) reported its fiscal 2025 Q1 earnings on May 12th, 2025. Results were below expectations with revenue declining 4% year-over-year, and net loss widening significantly. The company’s guidance for the full year remains unchanged, projecting revenues to align with 2024’s $725 million, excluding construction revenue. Adjusted EBITDA is expected to remain flat, with capital expenditures between $90 and $100 million. This outlook reflects a focus on cost management and investment monetization despite current challenges.

Revenue

ATN International experienced a 4.3% revenue decline in fiscal 2025 Q1, dropping to $175.08 million from $182.85 million in the same period last year. The International Telecom segment contributed $94.50 million, while the US Telecom segment generated $84.80 million. The Corporate and Other segment reported zero revenue. On a consolidated basis, revenue reached $179.29 million.

Earnings/Net Income

ATN International's fiscal 2025 Q1 net loss widened to $11.39 million, equivalent to a loss of $0.69 per share, marking a 43.3% increase from the previous year's Q1 loss of $7.95 million, or $0.50 per share. Overall, the EPS reflects a challenging financial period for the company.

Price Action

The stock price of ATN International fell 4.26% during the last trading day, with a weekly decline of 5.15% and a 14.25% drop month-to-date.

Post-Earnings Price Action Review

The strategy of buying ATN International shares after a revenue miss and holding for 30 days is considered high-risk due to several factors. Recent performance has shown a significant miss on EPS, highlighting the company's financial difficulties. The market tends to react negatively to earnings misses, potentially leading to further stock price declines. ATN's revenue has dropped by 7% compared to 2023, and the company faced an operating loss in Q3 2024, partly due to a non-cash goodwill impairment charge. The telecommunications sector faces challenges, including the end of subsidy programs, creating uncertainty for ATN's investment case. Backtesting insights suggest that such trading strategies may not be consistently profitable in the long run. Investors are advised to consider alternative strategies, such as waiting for a recovery in earnings or seeking more stable opportunities, to manage risks and potential losses.

CEO Commentary

Brad Martin, Chief Executive Officer of ATN International, remarked, "Our first quarter results reflect steady operational execution as we continue navigating a dynamic industry landscape. While revenues declined year-over-year due to the wind-down of subsidy programs, we delivered a modest year-over-year increase in Adjusted EBITDA supported by disciplined cost management. We also improved free cash flow, reflecting both focused capital management and the contribution of our network enhancements and expansion initiatives. As we move forward, we remain focused on monetizing the investments made during our recent three-year strategic capital spending cycle supported by ongoing cost management and efficiency initiatives."

Guidance

ATN International reaffirmed its outlook for the full year 2025, expecting revenue, excluding construction revenue, to be in line with last year's result of $725 million. Adjusted EBITDA is anticipated to be essentially flat with the prior year's result of $184 million. Capital expenditures are projected to be in the range of $90 to $100 million, net of reimbursements, and the net debt ratio is expected to remain flat, with a slight potential improvement exiting 2025 compared to 2.54x at the end of 2024.

Additional News

ATN International recently announced a quarterly dividend of $0.24 per share, paid on April 7, 2025, to stockholders of record as of March 31, 2025. The company did not repurchase any shares during the first quarter of 2025, maintaining its focus on strategic investments and efficient capital management. Additionally, ATN continues to leverage government grants to expand its infrastructure, aligning its capital expenditures with historical levels to drive network expansion while maintaining financial discipline. These initiatives are part of ATN's broader strategy to enhance shareholder value and sustain long-term growth.