Charter Communications Stock Falls After Missing Revenue Estimates

Charter Communications

Charter Communications Inc (NASDAQ: CHTR)

Charter Communications shares were down $17.58, or 5.58% to $297.23 in afternoon trading on Friday after third-quarter revenue of the cable provider fell short of expectations.

The Stamford, CT-based company saw revenue jump 4.2% YoY to $10.9 billion, thanks to strong growth in its internet, video, commercial and advertising services. However, profit surpassed the estimates of Wall Street analysts, coming in at $493 million.

CHTR stock, which was down 8% to $292.50 in premarket trade, has gone down more than 11% since the beginning of the year.

CHTR Earnings & Outlook

The company posted earnings of $493 million, or $2.11 per share, compared with $48 million, or $0.19 per share in the same period last year. Thompson Reuters, based on analyst forecasts expected the firm to report earnings of $ 1.04 a share.

Revenue grew 4.1% to $10.89 billion from $10.46 billion a year earlier but missed estimates of $10.93 billion. Sales from its video business rose from $4.21 billion in the prior-year quarter to $4.33 billion. Revenue from commercial services was $1.55 billion, compared with $1.49 billion in Q3 of fiscal 2017.

Advertising revenues jumped 18.1% during the quarter, boosted by a surge in political ads. Meanwhile, phone/voice revenues were $512 million, down 16% due to value-based pricing and drop in voice customers in the past year.

During the third quarter, Charter added 266,000 residential internet customers, surpassing FactSet expectations of 234,000. However, the company suffered a loss of 66,000 residential video customers who switched to cheaper streaming services, such as Prime Video and Netflix.

Charter Communications CEO Comments

“We are performing well through a very large integration, including completing all-digital and improving the quality and efficiency of our service operations. We have also significantly improved our products, including delivering faster Internet speeds with Gigabit speeds nationwide, and we have launched new products, like Spectrum Mobile,” commented Tom Rutledge, Chairman and Chief Executive Officer of Charter Communications.

“At the end of 2018, our integration of legacy TWC and Bright House will be largely complete and we will operate as a single company, with a superior product and value proposition. With significantly less customer-facing change in 2019, we expect continued improving service metrics with higher demand and retention, faster growth and falling capital intensity, driving meaningful free cash flow growth.”

Charter Communications, Inc. Company Profile

Charter Communications, Inc. provides broadband communications services. Its services include Spectrum TV, Spectrum Internet access, and Spectrum Voice. It offers business-to-business Internet access, data networking, business telephone, video and music entertainment services, and wireless backhaul.

It operates through Cable Services segment. Its advertising sales and production services are sold under the Spectrum Reach brand. The company was founded on July 22, 1999 and is headquartered in Stamford, CT. – CNN Money