Charter Expects Q3 RGU Boost


Charter Communications expects third-quarter revenue generating units to rise by between 30,000 and 50,000 subscribers, well ahead of the 6,100 RGUs added in the second quarter but behind the 82,000 RGUs added in the third quarter last year.
The announcement, made in a Securities and Exchange Commission filing Sept. 20, is in conjunction with an upcoming company presentation. Charter did not elaborate.
Revenue generating units are a common metric used by cable companies, a combination of basic, digital, high-speed data and telephony subscribers.
In addition, Charter said in the filing that it expects capital expenditures to be about $1.2 billion for the year.
Charter shares were down 35 cents each (1%) to $34.15 per share in early trading Monday.
Although Charter stressed that the third quarter is not yet complete and the preliminary results are subject to change, the announcement appears to show that the industry is at least beginning to climb back from what had been a disappointing second quarter for most MSOs. The second quarter was the first time in history that multichannel operators reported a collective loss of subscribers.
The third quarter is traditionally a good one for cable - that's when snow birds and college students return from summer residences. But the soft economy has dampened the expectations for some operators - last week Time Warner Cable chief financial officer Rob Marcus warned at an industry conference that it may report negative primary service unit (RGUs minus digital subscribers) growth in the third quarter.
Charter is expected to report actual third quarter results in November.
In a separate development, Charter said Monday that it will offer $750 million in senior notes in an effort to pay down debt.
Concurrently with the offer of the notes, due 2017, Charter's subsidiaries - Charter Operating and Charter Communications Operating Capital Corp. - have commenced an optional prepayment offer to prepay up to $750 million of Term B-1 loans ($3.3 billion aggregate principal amount) under the amended and restated credit agreement.