Better-than-Expected 1Q for Charter
By Mike Farrell -- Multichannel News, 5/7/2003 12:50:00 PM
Charter Communications Inc. CEO Carl Vogel was less than enthusiastic about the St. Louis-based MSO's first-quarter results Wednesday, but nevertheless, investors drove the stock up nearly 7 percent in afternoon trading, obviously relieved that the quarter was not as bad as they had expected.
Charter stock was up 13 cents per share to $2.01 each in afternoon trading, after the MSO reported revenue growth of 9.7 percent to $1.18 billion and operating-cash-flow growth of 7.5 percent to $458 million.
The stock closed trading Wednesday at $1.97 per share, down nearly 5 percent.
But what seemed to lift investor spirits was an indication that the troubled MSO was stemming its subscriber losses. Charter lost about 51,000 subscribers in the period -- including 32,000 digital customers -- about one-third of the 157,000-subscriber loss in the same period last year.
"We are reasonably pleased with our results," Vogel said on a conference call with analysts. "As I've said before, we're reasonably pleased with our competitive position. We have got a lot of work to do. We're totally focused on improving the operations of the company."
Although digital subscribers dipped to 2.65 million -- digital penetration is about 41 percent -- digital revenue increased 2 percent in the quarter, reflecting Charter's emphasis on higher-margin customers.
Charter also added about 134,000 new high-speed-data customers, ending the period with 1.3 million.
Vogel added that Charter's operational changes and cost-cutting initiatives that it started last year -- it reorganized into five geographic divisions and laid off about 10 percent of its work force -- are beginning to show positive results.
For example, Charter is squeezing more profit from operations -- cash flow from operations was $162 million in the quarter, up 59 percent from the same period last year.
In contrast, cash flow from investing activity was $231 million, about one-third of the $604 million investments generated last year. As a result, cash requirements for the business were just $69 million in the quarter, compared with $502 million in the prior year.
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