Investing.com -- Shares of Cable One (NYSE: CABO ) plummeted 41% following the release of its first quarter 2025 financial results, which highlighted a significant drop in net income and revenue. The company reported a 5.9% decrease in total revenues, from $404.3 million in the first quarter of 2024 to $380.6 million in the same period of 2025. Net income took a more drastic tumble, falling 93.0% from $37.4 million to $2.6 million year-over-year (YoY).

The decline in Cable One’s stock was driven by a combination of disappointing financial figures and strategic decisions that have raised concerns among investors. The company’s residential data revenues saw a decrease due to a reduction in subscribers and a 3.1% drop in average revenue per unit (ARPU), attributed to targeted pricing and product offerings in certain markets. Although business data revenues showed a slight 1.2% growth YoY, this was overshadowed by the overall negative performance.

Further impacting investor sentiment was the company’s announcement to suspend its quarterly cash dividend, a move that will save approximately $67 million annually. This decision was made without prior warning and lacked a new financial rationale, which has led to analyst downgrades and a potential shakeup in the shareholder base.

KeyBanc analyst Brandon Nispel downgraded Cable One from Overweight to Sector Weight, expressing that "1Q25 results are extremely disappointing: HSD net adds -10K, ARPUs down -3.1% y/y, and adj. EBITDA missing consensus by ~2%." Nispel emphasized that the company’s guidance lacked credibility due to a "series of misexecution."

Similarly, Raymond James analyst Frank Louthan downgraded the company from Outperform to Market Perform, citing the unexpected dividend suspension and lackluster first quarter results. Louthan remarked, "We expect the shareholder base to turn over and the path to regaining credibility to be long and arduous, and as such, we cannot have a constructive rating on the name."

Cable One’s liquidity position showed $149.1 million in cash and cash equivalents, with a debt balance of $3.57 billion as of March 31, 2025. The company’s capital expenditures for the first quarter amounted to $71.1 million, an increase compared to the previous year’s $65.9 million.

The company’s management remains focused on implementing a multi-year plan for sustained profitable growth, despite the decline in residential data subscribers and the challenges in the competitive environment. However, the market’s response to the first quarter performance and strategic decisions indicates that Cable One has substantial work ahead to restore investor confidence and achieve its growth objectives.

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