Charter’s Q2 Results Beat Wall Street Estimates; CEO Addresses New York Dust-Up, John Malone Board Exit, M&A Talk

Charter Communications, the No. 2 U.S. cable operator and a wild card in the media M&A derby, reported stellar second quarter numbers well ahead of Wall Street estimates.

Earnings of $273 million, or $1.15 a share, nearly doubled the figures from the year-earlier quarter, from $139 million or 52 cents. Wall Street analysts had been expecting earnings of 93 cents a share, according to FactSet.

Revenue rose 6% to $10.9 billion from $10.4 billion a year ago, also ahead of estimates. Charter lost 73,000 residential video customers in the quarter, less of a drop than the 91,000 it reported in the same period in 2017.

The company’s stock surged at the opening bell on the quarterly performance, rising nearly 5% to $307.56.

During a conference call with analysts, CEO Tom Rutledge said the company remains open to merger discussions, but isn’t dead-set on combining with a content company, as the persistent rumor has been. “Our views on content haven’t changed,” he said. “A lot of content companies have come to us and asked us to buy them.” Those overtures didn’t point to deals the company felt were logical, he said.

Rutledge also addressed the recent flare-up with New York state regulators. They have threatened to kick the company’s Spectrum service out of the state over what they say is a failure to comply with terms of the 2016 merger agreement with Time Warner Cable. “We believe we are in compliance,” Rutledge said. “If necessary, we will litigate.”

John Malone’s departure from Charter’s board also got some time during the conference call. Rutledge said he will “continue to be engaged with the company,” albeit with a reduced workload. “He has reached the point in his life where he feels he has to” limit his commitments.

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