Yahoo Finance Charter (CHTR) Q4 Earnings Lag, Internet User Base Up Y/Y
Charter Communications CHTR delivered fourth-quarter 2022 earnings of $7.69 per share, missing the Zacks Consensus Estimate by 4.2%. However, the reported figure declined 13.9% year over year.
Revenues of $13.598 billion increased 6.2% on a year-over-year basis owing to the residential, mobile and advertising sales growth. The top line missed the consensus mark by 0.82%.
Charter Communications, Inc. Price, Consensus and EPS Surprise
Charter Communications, Inc. price-consensus-eps-surprise-chart | Charter Communications, Inc. Quote
Segmental Details
Residential revenues totaled $10.3 billion in the fourth quarter, increased 0.4% year over year.
Internet revenues grew by 3.9% year over year to $5.6 billion, driven by growth in Internet customers, promotional rate step-ups, reduced bundled discounts and rate adjustments, partly offset by lower bundled revenue allocation.
Video revenues totaled $4.3 billion in the fourth quarter, down 3.5% year over year, due to a higher mix of lower priced video packages within Charter's video customer base and a decline in video customers during the last year.
Voice revenues totaled $379 million in the fourth quarter, declined 4.3% year over year, because of a decline in wireline voice customers over the last twelve months, partly offset by voice rate adjustments.
Commercial revenues increased by 3.3% year over year to $1.8 billion, driven by SMB and enterprise revenue growth of 2.4% and 4.9% year over year, respectively.
Fourth quarter advertising sales revenues of $558 million increased by 24.6% year over year, primarily driven by higher political revenues. Excluding political revenues in both periods, advertising sales revenues decreased by 3.4% year over year, due to lower local and national advertising revenues, partly offset by higher advanced advertising revenues.
Fourth quarter mobile revenues totaled $876 million, an increase of 38.7% year over year, driven by mobile line growth.
Subscriber Statistics
As of Dec 31, 2022, Charter had 30 million residential customer relationships. The fourth quarter of 2022 residential revenues per residential customer (excluding mobile) totaled $114.20 and increased 0.1% year over year, given promotional rate step-ups and rate adjustments.
Fourth quarter residential Internet customers increased by 92,000, compared with an increase of 172,000 customers during the fourth quarter of 2021. In October 2022, Charter introduced Spectrum One, which brings together Spectrum Internet, Advanced WiFi and Unlimited Spectrum MobileTM, to offer consumers faster, more reliable and secure online connections on their favorite devices at home and on the go in a high-value package.
Residential video customers decreased by 145,000 in the fourth quarter of 2022, compared with a decline of 71,000 in the fourth quarter of 2021. As of Dec 31, 2022, Charter had 14.5 million residential video customers.
During the fourth quarter of 2022, Charter added 615,000 mobile lines, compared with growth of 380,000 during the fourth quarter of 2021. Spectrum Mobile is available to all new and existing Spectrum Internet customers.
Operating Details
Total operating costs and expenses increased 4.6% from the year-ago quarter to $8.19 billion.
Programming costs dropped 3.3% year over year to $2.8 billion. Regulatory, connectivity and produced-content costs were down by 5.3% to $561 million.
Costs to service customers inched up 5.8% year over year to $1.97 billion. Marketing costs were $846 million, up 6.9% year over year.
Mobile costs jumped 35.7% year over year to $982 million.
Adjusted EBITDA increased 1.9% year over year to $5.48 billion.
Balance Sheet & Cash Flow
Cash flows from operating activities totaled $3.8 billion, which remained unchanged sequentially.
Free cash flow was $1.1 billion compared with the previous quarter’s $1.7 billion.
As of Dec 31, 2022, total principal amount of debt was $97.4 billion and Charter's credit facilities provided approximately $4 billion of additional liquidity in excess of Charter's $645 million cash position.
In the reported quarter, Charter repurchased 3.6 million shares of Charter Class A common stock and Charter Communications Holdings, LLC common units for approximately $1.3 billion.
Zacks Rank & Stocks to Consider
Charter currently holds a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are Manchester United MANU and Liberty Global LBTYA, each sporting a Zacks Rank #1 (Strong Buy), and Activision Blizzard ATVI, which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Manchester United have gained 70.9% in the past year. The Zacks Consensus Estimate for earnings is pegged at a loss of 1 cent, which has been constant over the past 30 days.
Shares of Liberty Global have declined 18.3% in the past year. Its earnings are estimated at 49 cents per share.
Shares of Activision Blizzard have declined 5.2% in the past year. The Zacks Consensus Estimate for earnings is pegged at $1.51 per share, which has increased by a penny over the past 30 days.
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