Charter Communications reported a 68% rise in diluted earnings per share in the first quarter as its total revenue climbed 5% to $11.7 billion, meeting Wall Street analysts’ expectations.
Earnings reached $1.86 per share, compared with $1.11 in the same quarter a year ago. Adjusted EBITDA rose 8% to $4.5 billion.
While its financial results were solid and its broadband business is thriving during COVID-19, the No. 2 U.S. cable operator shed 70,000 video subscribers in the period. While that was an improvement over the 152,000 a year ago, it illustrates how cord-cutting and -shaving continues to reshape the cable business.
Total internet customers increased 6% to 25.5 million and net additions of internet customers shot up 42% in the period. The company’s residential and business customer base, combining video, internet and mobile, increased 4.5% to 29.7 million.
Cable providers have been pivoting toward other services in recent years, particularly broadband. The rise of streaming gives them a chance to stay in business with longtime programming partners but under different terms than linear TV carriage. Last month, for example, Charter announced a deal to offer WarnerMedia’s HBO Max streaming service. Emphasizing broadband has made perfect sense during the COVID-19 pandemic.
“I am very proud that the products we deliver have played a key role in enabling social distancing, remote working, distance learning, and much more,” CEO Tom Rutledge said in the earnings release.
Rutledge and his management team are in the middle of a dust-up over the hefty fees customers pay for live sports. National and regional sports networks generally add at least $20 a month to most cable bills, but during the coronavirus pandemic, sports have been completely shut down since mid-March.
New York Attorney General Letitia James announced earlier this week she had contacted Charter and other pay-TV operators in search of refunds. The operators say they are looking to major programmers like ESPN and Fox to return some of their fees, though that scenario is far from a sure thing given the state of the economy.