• by Wayne Friedman , July 26, 2019

Charter Communications missed on second-quarter results for both revenue and net income -- which sank its stock price in early Friday morning trading.

Total revenue for the cable system owner/communications company was up 5% to $11.3 billion, with net income 14% higher to $386 million. Charter’s stock price was down 4% to $390.01 million. The company’s video customers -- still closely watched -- sank by 150,000 subscribers, now totaling 15.8 million.

Charter was forecast to lose 73,000 video customers. Video revenue was flat at $4.4 billion.

The positive takeaway remains Charter’s internet revenue -- 9% higher to $4.1 billion. Internet customers grew 221,000 to total 24.2 million. Voice revenue declined 8% to $489 million -- while voice sank by 207,000 subscribers, now totaling 9.8 million.

The number of Charter's residential customer relationships grew by 164,000. Among overall residential customers, monthly pricing was up 0.3% to $112.20. Advertising revenue is down 8% to $395 million, due to lower political advertising.

In terms of growing programming costs -- from higher retransmission/carriage fees -- Charter, in its SEC filing, expects future video subscriber declines, due to a number of factors.

This includes “the additional selling power as a result of media consolidation, increased demands by owners of broadcast stations for payment for retransmission consent or linking carriage of other services to retransmission consent, and additional programming, particularly new services."

“We have been unable to fully pass these increases on to our customers and do not expect to be able to do so in the future without a potential loss of customers.”

However, long-term for the company, Jeffrey Wlodarczak, entertainment/interactive subscription services analyst at Pivotal Research Group, is upbeat: “We see healthy operational upside driven by much higher margin data [Internet] gains that will overwhelm slowing pay TV.”