Charter Communications reported lower fourth-quarter earnings as it added more residential internet customers than expected while pay TV cord-cutting increased.
Charter lost 145,000 video customers in the fourth quarter, leaving it with 14.5 million residential video customers. A year ago, Charter lost 71,000 video customers in the fourth quarter.
Video revenue fell 3.5% in the quarter to $4.3 billion.
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Charter said it added 92,000 residential internet customers in the fourth quarter. A year ago in the fourth quarter, Charter added 172,000. Including business customers, Charter added 105,000 broadband customers.
Internet revenue rose 3.9% to $5.6 billion.
Analysts credited Charter’s new Spectrum One bundled offering for the higher-than-expected increase in internet customers, as well as a record 615,000 added mobile lines.
“In a low-churn environment, having an aggressive new customer-acquisition offer makes sense to us,” Evercore ISI media analyst Vijay Jayant said.
Net income dropped 26% to $1.2 billion, or $7.69 a share, from $1.6 billion, or $8.93 a share, a year ago.
Revenue rose 3.5% to $13.7 billion.
The financial numbers fell short of Wall Street expectations.
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Programming costs fell by $95 million, or 3.3%, as the number of video subscribers dropped and customers chose lower-priced tiers.
“We continued to execute well in 2022, growing customer relationships, revenue and EBITDA,” said Charter CEO Chris Winfrey. “In 2023 and the coming years, we remain focused on three core initiatives — network evolution, footprint expansion and operational execution. Each of these initiatives will deliver benefits for a growing base of customers, our employees and local communities, with long-term value creation for our shareholders.” ■
