Charter Reports Lower Q3 Net Income But Adds Broadband Subscribers

Charter Communications
(Image credit: Charter Communications)

Charter Communications reported lower third-quarter earnings but added 61,000 residential broadband subscribers, reversing a loss of 42,000 last quarter.

Broadband is the most profitable business for most cable operators, and slow growth — or outright decline — has been a concern for the industry. 

The third-quarter cable TV cord-cutting trend continued, with Charter losing 211,000 residential Spectrum video customers or 4.2% of its base. Charter’s video customer losses were nearly double last year’s losses. 

Comcast and Verizon Communications have also reported heavier cord-cutting this quarter.

The company added 396,000 mobile lines, up from 244,000 added a year ago.

Charter has been pushing Spectrum One, which offers a package of internet, advanced Wi-Fi and mobile service for $49.99 a month for the first 12 months.

“Charter now delivers the nation’s first converged broadband, Wi-Fi and mobile experience at prices that generate significant savings for consumers,” Charter chairman and CEO Tom Rutledge said. “And as I look at our existing advanced offerings and our future product capabilities, we are well positioned to grow our business at very attractive rates for many years to come.”

Charter previously announced that Rutledge will be stepping down as CEO effective December 1, becoming executive chairman. The new CEO will be chief operating officer Chris Winfrey. 

Net income fell 2.5% to $1.185 billion, or $7.51 a share, from $1.217 billion, or $6.69 a share, a year ago. The company said the decline was caused by higher interest expenses. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) rose 2.4% to $5.4 billion.

Revenue rose 3.1% to $13.6 billion.

The results were below Wall Street expectations.

Revenue from internet customers rose 3.9% to $5.571 billion. Video revenue fell 2.7% to $.379 billion. Revenue from voice fell 4.6% to $391 million.

Advertising sales revenue rose 22.9%. ■

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.