Charter Stock Soars

Shares Up 8% on Strong Q4, M&A Prospects
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Charter Communications stock soared as much as 8% each on Thursday after it reported strong fourth quarter results and reiterated its commitment to closing its series of swaps, sales and spins in the wake of the Comcast-Time Warner Cable merger.

Charter added 3,000 basic video customers in the period – in line with analysts’ expectations – and grew revenue and cash flow by double digits. The mid-sized cable operator also completed its two-year all-digital plant upgrade, which should lower capital expenditures in the future and fuel even more robust growth.

That helped drive up shares in the Connecticut-based cable company as much as $12.66 each to $175.85 per share in early trading. The stock closed the day at $174.30 each, up 6.8% or $11.11 per share.

While the strong results were a key catalyst to the stock’s appreciation Thursday, investors also were encouraged by Charter CEO Tom Rutledge’s comments on its commitment to gaining scale.

In a conference call with analysts, Rutledge said Charter is interested in acquiring cable companies because it believes in the business.

“We, as a company, are interested in acquisitions because we strongly believe that the cable business, as we see it, is a good business and that it has potential for growth,” Rutledge said. “And so any platform out there that's available that would allow us to take advantage of scale and unsold passings is attractive to us at the right price.”

That would include Time Warner Cable if it were to come back on the market, but Rutledge added that Charter is focusing on getting its existing deal done. Rutledge said that Charter’s transition and integration planning with Comcast is progressing well.  

Charter agreed back in April to a series of sales, swaps and spins related to the Comcast-TWC merger, which will significantly increase its footprint and make it the second largest cable operator in the country.

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