Charter Communications Reports Mixed Q2 Results After Losing 200,000 Cable TV Customers
Charter Communications reported mixed results for its second quarter of 2023 Friday, posting net income of $1.2 billion or $8.15 per share, above Wall Street’s expectations, while total revenue fell short of the forecast, growing 0.5% year over year to $13.7 billion.
Analysts surveyed by Zacks Investment Research were expecting earnings per share of $7.66 per share on revenue of $13.9 billion.
Residential revenue fell 0.3% year-over-year to $10.8 billion, internet revenue rose 3.1% year-over-year to $5.7 billion and video revenue slid 6.6% year over year to $4.2 billion. Voice revenue dropped 8.3% year over year to $365 million, mobile service revenue surged 29.8% year over year to $539 million and commercial revenue climbed 1.4% year over year to $1.8 billion.
Advertising sales revenue jumped 16.5% year over year to $384 million, driven by lower political spending.
Charter reported a total of 32.2 million residential and small and medium business customer relationships, excluding mobile-only relationships. Total residential and small and medium business internet customers increased by 77,000 to 30.6 million and total residential and small and medium business mobile lines increased by 648,000 to 6.6 million mobile lines.
Residential video customers decreased by 189,000 to 14.1 million, and small and medium business video customers decreased by 11,000 to 635 million. Charter plans to begin deploying Xumo-branded streaming devices in late 2023.
“We’re losing the least amount of video customers of any of our peers or competitors,” Charter president and CEO Chris Winfrey told analysts on the company’s earnings call.
He blamed programmers for increasing pricing on the pay TV bundle.
“Programmers have required us to take and provide content for customers who may not necessarily watch or value and at the same time increase the pricing…so you’ve priced out a large number of customers out of the marketplace through that strategy by the programmers,” he said. “And, at the same time, they’ve gone around and sold that same content at a lower price in a less secure environment. So they’ve devalued the same content and that creates a structural problem for the business.”
He called on programmers to offer more flexibility to Charter for its content bundle pricing.
“We’ve always thought that if we had the ability to create packages and we had better security in the marketplaces that we could sell more video and that would be good obviously for customers, it would be good for the programmers ultimately, and it would be better for us,” he noted. “But that will take a fair amount of leadership in the programming space to be able to get to that environment.”
Shares of Charter Communications slipped 1.7% in pre-market trading following the earnings announcement.
The post Charter Communications Reports Mixed Q2 Results After Losing 200,000 Cable TV Customers appeared first on TheWrap.
