Charter Communications Q4 Profit Tops View, But Revenues Miss

(RTTNews) - Cable operator Charter Communications, Inc. (CHTR) reported Friday a profit for the fourth quarter compared to a loss last year, reflecting double-digit revenue growth amid improvement in Internet, video and commercial revenues. Pro forma earnings per share topped analysts' expectations, while quarterly revenues missed estimates by a whisker.

The Stamford, Connecticut-based fourth-largest cable operator in the U.S., reported net income of $39 million or $0.35 per share for the fourth quarter, compared to a net loss of $40 million or $0.41 per share in the prior-year quarter.

Excluding items, pro forma net income was $39 million or $0.35 per share, compared to a proforma net loss of $73 million or $0.73 per share in the year-ago quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.24 per share for the quarter. Analysts estimates typically exclude special items.

Total revenues for the quarter grew 12.3 percent to $2.15 billion from $1.91 billion in the same quarter last year, but missed seventeen Wall Street analysts' consensus estimate of $2.16 billion by a whisker. Revenues grew 5 percent on a proforma basis.

Video revenues improved 12.8 percent to $1.05 billion, and Internet revenues grew 22.4 percent to $590 million, while voice revenues declined 17.2 percent to $154 million from the year-ago quarter.

Commercial revenues increased 29.8 percent to $228 million, while advertising sales revenues decreased 13.5 percent to $83 million from the prior-year quarter.

Residential revenues grew 4.9 percent on a pro forma basis, with residential revenue per customer relationship totaling $107.97, up 2.1 percent on a pro forma basis from last year.

Total residential customer relationships grew 63,000 on a pro forma basis during the quarter, compared to 24,000 in the year-ago quarter. Residential primary service units (PSUs) increased 147,000, compared to 57,000 last year.

Charter added 93,000 residential Internet customers in the fourth quarter, compared to 59,000 a year ago. The company also added 56,000 residential voice customers, compared to 34,000 last year, while residential video customers declined 2,000, compared to a loss of 36,000 in the year-ago period.

Commercial customer relationships grew by 16,000 on a pro forma basis during the quarter, compared to a gain of 4,000 last year. Commercial PSUs increased 18,000 compared to 12,000 in the year-ago quarter.

"Our 2013 results show the early success of our strategies to drive accelerated customer growth. We now deliver a competitive, highly valuable suite of products and services to our customers, and we are beginning to execute at a high level, evidenced by improving trends through the year," President and CEO Tom Rutledge said in a statement.

For fiscal 2013, the company reported a net loss of $169 million or $1.65 per share, narrower than $304 million or $3.05 per share in the prior year.

Excluding items, adjusted net loss for the year was $194 million or $1.90 per share, compared to last year's $392 million or $3.93 per share.

Total revenues for the full year grew 8.7 percent to $8.16 billion from $7.50 billion in the previous year. Revenues grew 5 percent on a proforma basis.

Analysts expected the company to report full-year 2013 loss of $1.91 per share on annual revenues of $8.28 billion.

"We will continue that momentum in 2014, and plan to complete our all-digital initiative this year, allowing us to deliver a superior set of services across the vast majority of our footprint. Combined with improved service capabilities and higher customer satisfaction, these strategies are expected to result in greater market share and improving cash flow per home passed, as we position Charter for long-term growth and value creation," Rutledge added.

In Friday's regular trading session, CHTR is currently trading at $126.01, down $5.84 or 4.43% on a volume of 0.44 million shares. In the past 52-week period, the stock has been trading in a range of $76.25 to $144.02.