Altice Profit Up Slightly in Tricky Market

PARIS—Altice NV, the telecoms group buying Cablevision Systems Corp. for $10 billion, said Wednesday it continued to grow core earnings despite what it called a "challenging" quarter for its biggest unit in the highly competitive French market.

The company, founded by billionaire entrepreneur Patrick Drahi, reported a 0.9% year-over-year rise in adjusted earnings before interest, taxes, depreciation and amortization—something analysts say is an important measure of the firm's performance—to €1.6 billion ($1.82 billion), boosted by its Portuguese unit.

First-quarter revenue year-over-year fell 2.7% to €4.3 billion for the three months ended March 31, as its French unit SFR was hit by competition for clients from market leader Orange SA, Bouygues Telecom and low-cost operator Iliad SA.

The results highlight the tough challenge Mr. Drahi faces in showing that he can grow the top line of his businesses while keeping costs low to meet ambitious earnings targets. Altice had been one of Europe's most acquisitive companies in recent years but drew a line under acquisitions in 2016, focusing instead on integrating its various units and improving its operational performance.

The French unit—which was created when Mr. Drahi merged his cable company, Numericable, with mobile phone firm SFR in 2014—is closely watched by analysts as a bellwether of Mr. Drahi's ability to execute on his game plan of quickly slashing costs in his companies before reinvesting the savings in growing them.

SFR said adjusted Ebitda fell 9% to €851 million, hit by competition in France as a number of the main operators, including SFR, launched special offers to lure customers in both fixed line and mobile in recent months. SFR's first-quarter revenue fell 6.1% to €2.57 billion as it lost clients compared with the same period last year.

Altice, which has cable and telecoms operations in Europe, the U.S. and Israel, confirmed its guidance for 2016.

Write to Nick Kostov at [e-mail]

(END) Dow Jones Newswires

May 11, 2016 01:35 ET (05:35 GMT)

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