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Charter Communications (CHTR) Q3 Earnings Miss Estimates

Charter Communications Inc. CHTR reported disappointing financial results in third-quarter 2017, wherein both the top and the bottom line lagged the Zacks Consensus Estimate.

GAAP net income in the reported quarter was $48 million compared with net income of $189 million in the year-ago quarter. Quarterly earnings of 19 cents per share were well below the Zacks Consensus Estimate of $1.04.

Charter Communications, Inc. Price, Consensus and EPS Surprise

 

Charter Communications, Inc. Price, Consensus and EPS Surprise | Charter Communications, Inc. Quote

Third-quarter 2017 total revenues of $10,458 million increased 4.2% year over year but missed the Zacks Consensus Estimate of approximately $10,485 million.

Residential segment revenues came in at $8,380 million compared with $8,028 million in the year-ago quarter. Within the Residential segment, Video revenues totaled $4,213 million, up 2.9% year over year. Internet revenues came in at $3,556 million, increasing 10.9% from the prior-year quarter, while Voice revenues were $611 million, declining 16.1% year over year.

Commercial revenues totaled $1,484 million, reflecting an increase of 8% year over year. Within the Commercial segment, small and medium business revenues were $931 million, up 7.4% year over year. Enterprise revenues came in at $553 million, increasing 8.9% on a year-over-year basis.

Advertising revenues were $373 million, declining 11.1% year over year. Other revenues came in at $221 million, increasing 3% year over year.

Quarterly operating costs and expenses were $6,639 million compared with $6,401 million in the year-ago quarter. Third-quarter adjusted EBITDA was $3,819 million compared with $3,636 million in the year-ago quarter. EBITDA margin came in at 36.5% compared with 36.2% in third-quarter 2016.

In the third quarter of 2017, Charter Communications generated $2,908 million of cash from operations compared with $2,801 million a year ago. Free cash flow in the reported quarter was $594 million compared with $1,001 million in the year-ago quarter.

At the end of the reported quarter, Charter Communications had $2,164 million of cash and cash equivalents and ,132 million of outstanding debt compared with $1,535 million and $62,464 million, respectively, at the end of 2016. The debt-to-capitalization ratio at the end of the reported quarter was 0.61 compared with 0.54 at the end of 2016.

Charter Communications currently carries a Zacks Rank #4 (Sell). The company competes with AT&T Inc. T, DISH Network Corp. DISH and Comcast Corp. CMCSA in the intensely competitive pay-TV industry. AT&T and DISH Network have a Zacks Rank #4, while Comcast carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Subscriber Statistics

Residential Segment: As of Sep 30, 2017, Charter Communications’ residential high-speed Internet subscribers increased 249,000 to 22.282 million. Voice subscribers grew 27,000 to 10.405 million. However, video subscribers decreased 104,000 to 16.542 million.

Monthly residential revenues per customer were $110.12 compared with $109.70 in the prior-year quarter. Single Play penetration was 40.7%, Double Play penetration was 25.3% and Triple Play penetration was 34%.

Commercial Segment:  As of Sep 30, 2017, Charter Communications had 440,000 video, 1,321,000 high-speed Internet and 881,000 voice subscribers. During the reported quarter, the company added 15,000 video customers, 36,000 high-speed Internet and 34,000 voice customers. Monthly small and medium business revenues per customer were $206.64 compared with $214.53 in the prior-year quarter. Enterprise customers were 0.108 million, increasing 16.1% year over year.

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