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Cable giant Charter Communications, in which John Malone’s Liberty Broadband owns a big stake, reported its third-quarter results Friday, including slowed broadband subscriber growth and a bigger pay TV user loss than in the year-ago period.
The company, led by chairman and CEO Tom Rutledge, lost 204,000 pay TV subscribers in its latest quarter, compared with a loss of 121,000 in the year-ago period. It ended September with a total of 15.29 million pay TV customers.
Charter’s broadband user growth in the third quarter slowed as it added 75,000 customers after gaining 265,000 in the year-ago period. It ended the third quarter with nearly 30.33 million broadband subscribers. On Thursday, Charter had reported that its broadband user base grew by 14,000 in the latest quarter.
Charter also added 396,000 mobile phone lines in the third quarter, compared with 244,000 additions in the year-ago period. It ended September with nearly 4.68 million total mobile lines.
“Charter now delivers the nation’s first converged broadband, WiFi and mobile experience at prices that generate significant savings for consumers,” said Rutledge. “And as I look at our existing advanced offerings, and our future product capabilities, we are well positioned to grow our business at very attractive rates for many years to come.”
Charter’s third-quarter revenue of $13.6 billion grew by 3.1 percent, “driven by mobile revenue growth of 40.2 percent, advertising sales revenue growth of 22.9 percent and residential revenue growth of 0.7 percent,” the firm said. Its quarterly earnings dropped 2.5 percent to $1.19 billion amid higher interest expense. But adjusted earnings before interest, taxes, depreciation and amortization rose by 2.4 percent to $5.4 billion. The financials came in below Wall Street expectations.
Friday’s earnings report was Charter’s first since it named, in late September, Chris Winfrey president and CEO, effective Dec. 1. Winfrey has served as Charter’s COO after more than a decade as its CFO. Rutledge, who announced his plans to retire as CEO after a 50-year career beginning as a technician in 1972 while in college, will serve as executive chairman of Charter’s board of directors through the end of his current contract in November of 2023.
Winfrey during an earnings conference call signaled continuity in the company’s product, packaging and pricing strategies. “I don’t expect any seismic shifts,” he said. Winfrey added he was looking forward to “continue to help Charter grow and to create shareholder value.”
Addressing the challenges cable companies have faced this year in terms of slowing broadband subscriber growth, he cited reduced moving activity as the largest driver. “Market transaction volume will eventually pick up, and so will our internet net adds,” he argued.
Winfrey also called it “a privilege” to work for and learn from Rutledge, saying the outgoing CEO “has mentored all of us here to reinvent cable.”
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