Charter shares are down 5.9% in pre market trading after it reported Q1 financials that fell short of the Street’s expectations.
The No. 2 cable operator was caught in a squeeze, at least in its video business. Subscriptions fell as former customers of Time Warner Cable — which Charter acquired last year — saw discounts expire, while the No. 2 cable operator’s programming costs continued to rise.
Charter reported net earnings of $155 million, down 13.4% from last year when you include TWC results, with revenues of $10.16 billion, up 4.3%. Analysts thought the top line would hit $10.25 billion.
Earnings at 57 cents a share also contrast with expectations for 84 cents.
“As we near the first anniversary of the close of our transformative transactions in May of last year, the execution of our integration and operating plan remains on track,” CEO Tom Rutledge says. “We have now launched our Spectrum pricing and packaging to nearly all of the homes we pass in our new footprint. We are already seeing the benefits of our customer-focused strategy in those markets, including greater connect volumes and the sales of higher quality products, all of which will lead to higher customer satisfaction, lower churn, and faster customer and financial growth in future quarters.”
Charter had 16.74 million video subscribers, down 2% vs last year and down 100,000 vs the previous quarter.
Broadband subscriptions, at 21.8 million, were up 6.7% vs last year — and up 428,000 in the quarter.
Programming expenses rose 8.2% which Charter says reflects “contractual programming increases, renewals and improving expanded basic video sell in at Legacy TWC.”
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.