Charter earnings jump on digital plans
Charter Communications’ earnings rocketed in the past quarter, as it moved ahead with a number of digital projects, the Stamford-based company reported Tuesday.
The nation’s second-largest cable provider’s profit of approximately $273 million nearly doubled the total from a year ago, as it benefited from higher adjusted earnings and lower expenses related to transactions and severances. Revenues increased 5 percent year over year to about $10.9 billion.
“Customer growth remains strong despite our significant integration activity and the short-term disruption it creates,” Charter CEO and Chairman Tom Rutledge said on an earnings call Tuesday, referring to work related to the 2016 acquisitions of Time Warner Cable and Bright House Networks. “We remain confident in our ability to accelerate growth through higher sales, lower (customer) churn and by increasing operational efficiency.”
Charter now serves about 25.9 million residences and 1.8 million small- and medium-sized businesses. Its total customer base grew about 3 percent from a year ago.
The company’s approximately 16.2 million video customers represented a 2 percent drop from a year ago. Its internet consumer base rose 5 percent to around 23 million. Its voice business’ roughly 10.3 million customers was essentially flat from a year ago.
“It isn’t just going to go away overnight,” Rutledge said of the video declines. “I think we can manage our way through it and use video to drive relationships for the foreseeable future.”
Among major new programs, the company launched last month a mobile platform, which is available to new and existing customers of its Spectrum-branded internet service. The firm did not disclose customer total for that segment.
“The launch has gone very well,” Rutledge said. “We’re scaling the operation, which is intentionally generating relatively small order volume as we ramp up features and marketing through the summer.”
The company is also advancing initiatives to increase its internet-connection speeds and become “fully digitized,” by offering digital set-top boxes to customers across the country, Rutledge said.
Among investment analysts’ questions on the call, Rutledge was asked about the impact of the New York Public Service Commission announcing last Friday it had revoked its approval of Charter’s merger with Time Warner Cable because of reported violations of the agreement.
The PSC has ordered Charter to file a plan in the next 60 days to turn over service in the state to another provider. Rutledge said he was hopeful the dispute could be resolved, but he did not rule out the company litigating the matter.
“We believe we are in compliance,” Rutledge said. “We live up to our commitments. In fact, we’re well ahead of our obligations in terms of speed upgrades and in build-out itself.”
Charter shares closed Tuesday at about $305, up 3.63 percent from their Monday finish.
email@example.com; 203-964-2236; twitter: @paulschott