Charter Has Solid Q1


Charter Communications reported solid first quarter operating results, driven by gains in commercial and high-speed Internet services that exceeded analysts' expectations.
Charter ended the period with revenue of $1.8 billion (up 3.1%) and cash flow of $663 million, a 4.7% increase. Fueling that increase was a strong rise in commercial services revenue - up 17.1% in the period to $137 million.
Charter added about 88,000 high-speed Internet customers in the period and 24,000 telephone customers. The company lost 25,100 basic video customers but added 28,400 digital cable subscribers.
Pivotal Research Group principal and media & communications analyst Jeff Wlodarczak was encouraged by the results, particularly the high-speed data performance, which outpaced his estimate of 50,000 additional customers. Wlodarczak added that the stronger increase also occurred during an aggressive price promotion from Charter's digital subscriber line competitors.
"We believe inevitably speed will matter for the vast majority of U.S. households and Charter controls the fastest pipe in their footprint by a wide margin, which will allow them to take share and price as well as drive better phone additions and moderate video losses (given the effects of bundling)," Wlodarczak wrote.
Charter stock was down 1.9% ($1.12 each) to $58.18 per share in afternoon trading Tuesday.