Charter Communications (NASDAQ:CHTR) Announces Quarterly Earnings Results, Misses Estimates By $29.40 EPS

Charter Communications (NASDAQ:CHTR) posted its earnings results on Friday. The company reported ($20.50) earnings per share for the quarter, missing the consensus estimate of $8.90 by ($29.40), FiscalAI reports. The company had revenue of $14.92 billion for the quarter, compared to analysts’ expectations of $13.50 billion. Charter Communications had a net margin of 9.05% and a return on equity of 23.71%. The business’s revenue was up 9.1% on a year-over-year basis. During the same period in the previous year, the business posted $8.34 earnings per share.

Here are the key takeaways from Charter Communications’ conference call:

• Charter announced an end-to-end operating overhaul focused on winning more internet customers, improving service and reducing churn, while simplifying its offers and organization. Management says it aims to grow customer connections while maintaining ARPU, but gave no timeline for returning to growth.
• Core results remained pressured: Legacy Charter lost 156,000 internet customers, compared with 109,000 a year earlier, while pro forma revenue fell 1.5% and adjusted EBITDA declined 4% (3% excluding Cox transition costs). The company attributed subscriber weakness to intense competition and lower connects.
• Since Spectrum Day launched in Cox’s markets on September 16, management says Cox’s internet loss run rate has been cut in half, with mobile-line additions also improving. Cox remains under-penetrated, though its internet churn is still higher than Charter’s.
• Charter is targeting an additional $2 billion in annualized operating expense savings over 18 months, on top of more than $1 billion in expected Cox transaction synergies. Management also expects 2027 capital expenditures of $11 billion or less, supporting its outlook for higher free cash flow over time.
• Debt principal was $109 billion and leverage stood at 3.93x at quarter-end; Charter targets 3.5x within three years and expects most fourth-quarter free cash flow to go toward debt reduction. Management also plans some share repurchases, aiming to balance debt paydown with equity returns.

Charter Communications Trading Down 6.2%

Shares of NASDAQ CHTR opened at $118.07 on Friday. The business’s 50 day moving average is $120.93 and its two-hundred day moving average is $163.33. The company has a debt-to-equity ratio of 4.32, a current ratio of 0.36 and a quick ratio of 0.36. Charter Communications has a 1-year low of $101.11 and a 1-year high of $254.11. The stock has a market capitalization of $14.08 billion, a P/E ratio of 12.21, a PEG ratio of 0.24 and a beta of 0.73.

Trending Headlines about Charter Communications

Here are the key news stories impacting Charter Communications this week:

• Positive Sentiment: Charter reported Q3 revenue of $14.92 billion, above estimates, and adjusted EPS of $21.70, also ahead of consensus. Revenue growth was aided by the Cox acquisition. Charter Communications tops Q3 earnings and revenue estimates
• Positive Sentiment: The company launched a new operating model aimed at returning to growth, improving its internet offerings, and using mobile and video services to attract customers. Management’s plan includes about $2 billion in cost cuts, which could help profitability if executed. Charter announces Q3 results and launches new operating model
• Negative Sentiment: Broadband customer losses worsened in Q3, overshadowing the earnings and revenue beats. Investors are concerned that competition is making it harder for Charter to stabilize its core internet business. Charter’s cost-cutting plan is overshadowed by subscriber losses
• Negative Sentiment: A $6.33 billion franchise impairment drove a reported GAAP loss of $20.50 per share, creating a sharp contrast with the adjusted earnings beat. The impairment and declining cash flow added to concerns about the quarter’s underlying performance. Charter Q3 earnings beat on debt gain amid franchise impairment

Analysts Set New Price Targets

Several research firms have commented on CHTR. Barclays dropped their price objective on shares of Charter Communications from $130.00 to $115.00 and set an “underweight” rating for the company in a report on Monday, July 27th. Bank of America reaffirmed a “buy” rating on shares of Charter Communications in a report on Monday, July 27th. UBS Group reduced their target price on Charter Communications from $235.00 to $140.00 and set a “neutral” rating on the stock in a report on Monday, July 27th. TD Cowen decreased their target price on Charter Communications from $413.00 to $380.00 and set a “buy” rating on the stock in a research report on Monday, July 27th. Finally, Sanford C. Bernstein reissued a “market perform” rating and set a $150.00 price target on shares of Charter Communications in a research note on Monday, July 27th. Five analysts have rated the stock with a Buy rating, nine have issued a Hold rating and seven have issued a Sell rating to the stock. According to MarketBeat, the stock has a consensus rating of “Reduce” and an average price target of $200.18.

Charter Communications Company Profile

Charter Communications, Inc provides broadband, video, voice and mobile services in the United States, primarily under its Spectrum brand. Its residential offerings include high-speed internet, television and home phone services, while its business services include connectivity, communications and managed solutions for organizations.

The company also offers Spectrum Mobile, a wireless service that complements its broadband business. Charter serves customers across a broad U.S. footprint, including communities where it provides services over its cable network.

Founded in 1993, Charter expanded significantly through its 2016 acquisitions of Time Warner Cable and Bright House Networks, bringing those operations under the Spectrum brand.