Charter’s share price spiked nearly 3% before diving to -1.2% in morning trading as investors absorbed the cable company’s mixed Q1 report on a morning of overall anxiety in global markets. Charter reported a net loss of $94M, an improvement from the $110M loss in the same period last year, on revenues of $1.83B, up 3.2%. Analysts expected revenues to be slightly higher, at $1.84B. But the loss, at 95 cents a share, was worse than the 59 cent loss that company watchers forecast. The company says that its programming costs are up $25M vs last year even though it has lost video customers since early 2011. “It’s become a big number,” as well as “a difficult part of the business to manage,” CEO Tom Rutledge told analysts. Video revenues came in at $895M, -2.4%. That was offset by gains in sales of broadband, phone, and commercial services. But even though Charter had fewer video customers than it had a year ago, the number was up by 20,000 to 4.2M in the first three months of 2012. The increase stood out in a period when other operators including Comcast and Time Warner Cable lost video customers. Charter says it expects to build on the momentum by adding HD channels — it should have 100 by mid-year. Rutledge adds that he’s optimistic because “the economy isn’t getting worse” as Verizon and AT&T hit the brakes on their spending to build their rival video services. The company raised rates about 3% in March.
Charter, which emerged from Chapter 11 bankruptcy protection in 2009, has struggled to keep up with advances in cable technology. Still, Rutledge says that Charter will introduce “a tablet-based video product” this year with some features found in other pay TV companies’ TV Everywhere streaming services. A lot of Charter customers have old set top boxes, but Rutledge says the company could make it possible for customers to use tablets or smartphones to change channels, search for shows, and control the DVR — lessening the need to spend heavily on new boxes. Rutledge punted on a question about whether anything has changed with Charter’s plan to offer customers the feature-packed TiVo Premiere DVR in place of a conventional set top box. Speaking broadly about consumer technology plans he says, “how that will all evolve, I’m not sure.”