Key Financial Data
- Total revenue: $13.7 billion (-0.9% year-over)
- Net income: $1.1 billion (-11.2%)
- Broadband customers: 29.8 million (-1.5%)
- Video customers: 12.6 million (-3.5%)
- Voice customers: 6.2 million (-13.6%)
- Mobile lines: 11.4 million (+21.8%)
- Residential revenue: $10.6 billion (-1.1%)
- Residential ARPU: $122.63 (+1%)
- Read more Q3 media earnings coverage
Charter Communications continued to experience higher pay television and broadband churn that chipped away at its customer base and ate into revenue during the third quarter (Q3) of the year.
The Stamford-based company said Friday that total revenue slipped 0.9 percent from a year earlier to $13.7 billion, driven by continued erosion in its traditional video business and lower ad sales. Net income attributable to Charter shareholders fell 11 percent to $1.1 billion, while adjusted EBITDA declined 1.5 percent to $5.6 billion.
Charter lost 109,000 broadband customers in the quarter, bringing its Internet total to 29.8 million, its second consecutive quarterly decline as the company contends with fiber and fixed wireless competition.
Video losses continued, but slowed considerably: Only 70,000 customers “cut the cord” on Charter during Q3, compared with 300,000 who ditched Spectrum TV last year. Charter said the improvement was due to simplified pricing and better marketing of its commitment to provide access to network-owned apps like HBO Max, Disney Plus and Hulu in newer packages.
Wireless service remained the growth engine: Charter added 493,000 mobile lines in the quarter, pushing its total to 11.4 million, a 22 percent increase compared with last year. The company said Spectrum Mobile’s appeal — no contracts, inclusive pricing and access to a reliable 5G network — has made it central to its broadband bundle strategy.
Overall connectivity revenue, including Internet and mobile, rose nearly 4 percent to $6.9 billion. Advertising sales, however, plunged more than 21 percent due to a weak political cycle and softer local and national markets.
Capital expenditures surged 19 percent to $3.1 billion, reflecting ongoing network upgrades and rural expansion efforts. Free cash flow was essentially flat at $1.6 billion, as higher spending offset increased operating cash flow.
Stock Price
In a statement that accompanied Charter’s Q3 earning release, CEO Chris Winfrey said the company was focused on generating free cash flow and completing its network evolution over the next two years.
“We are operating well in a competitive environment,” Winfrey said. “Our service delivery improvements are being recognized, and we are saving customers hundreds and often thousands of dollars per year with our products.”
Despite subscriber declines, Charter continues to reward shareholders, repurchasing 7.6 million shares for $2.2 billion during Q3.
