Charter 4Q Loss Widens
Wednesday February 28, 6:14 pm ET
By Christopher Leonard, AP Business Writer
Charter 4th-Quarter Loss Widens Despite Sharp Rise in Revenue, Customer Rolls
ST. LOUIS (AP) -- Charter Communications Inc., the cable operator controlled by Microsoft co-founder Paul Allen, said Wednesday its fourth-quarter loss widened, even as overall revenue rose 10 percent.
The company said profits were hurt by a $54 million hike in interest payments and tax costs.
Chief Executive Neil Smit said current losses will be offset in the future as Charter is laying the foundation for growth by investing in "bundled" services that offer customers television, Internet and phone services through their cable line.
"Bundling is the key to driving growth and the addition of phone (service) is the key to bundling success," Smit told investors during a conference call Wednesday.
Charter reported a loss after paying preferred dividends of $396 million, or $1.08 per share, in the October-December quarter, compared with a year-ago loss of $336 million, or $1.06 per share.
Analysts surveyed by Thomson Financial expected a loss of 80 cents per share. Those estimates typically exclude one-time items.
Charter's stock price fell 1 cent, or less than 1 percent, to close at $3.01 a share Wednesday on the Nasdaq Stock Market.
Revenue rose 10 percent to $1.41 billion from $1.29 billion a year ago, in line with analysts' estimates. Demand for high-speed Internet and telephone services drove the revenue gain.
Smit pointed out that Charter was boosting its customer base through a targeted marketing plan. The company finished the year with 445,850 telephone customers, up 30 percent from the end of September.
But rising costs took a bite out of profits, with expenses rising 13 percent to $910 million on a pro forma basis during the quarter.
Smit said in the future, bundling services will not only help Charter win more customers, but will deliver higher profit margins on new accounts.
Cable companies that offer television, Internet and phone have been able to increase customer rolls in recent periods, poaching subscribers from satellite broadcasters or single-play telecommunications companies.
For the year, Charter's loss widened to $1.37 billion, or $4.13 per share, from a loss of $967 million, or $3.13 a share, a year earlier. Revenue rose 9 percent to $5.5 billion from $5.03 billion.
Charter Communications: http://www.charter.com