• by Wayne Friedman , February 2, 2024

For Charter Communications, broadband business results were below expectations for the fourth quarter of 2023 -- with a loss of 62,000 subscribers and a decline of 248,000 video subscribers.

This pushed Charter’s stock price way down 15% in early Friday trading to $326.81.

Expected profits -- via earnings per share -- sharply underdelivered as well, down 20% from consensus estimates to $7.07, compared to what investors were expecting -- $8.44. Net income to Charter subscribers was down 12% to $1.06 billion.

And a more troubling result is that the average revenue per user per month (ARPU) is also “lagging” says Steven Cahall, media analyst for Wells Fargo Securities -- at $67.72 for broadband, slightly under expectations. 

Video ARPU is also suffering -- now at $95.52, down from $97.26 in the fourth quarter a year ago. 

Broadband customers now stand at 30.6 million, down 0.5% from a year ago. Analysts were expecting a much smaller 10,000 net loss in broadband subscribers during the period.  Video subscribers sank another 7% to 14.1 million.

Broadband revenue was up 3% to $5.8 billion, resulting from better ARPU versus the year before well. Video revenue continued to slide downward, losing 8% to $3.9 billion. 

Some growth in its voice and mobile phone business helped Charter’s overall revenue come in as flat versus a year ago --  $13.7 billion. 

Cash flow -- adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) -- was up slightly 2% to $5.6 billion. Free cash flow (FCF) also suffered down 7% to $1.01 billion versus a year ago. 

Charter posted $428 million in advertising revenue from local cable business down 23% from a year ago ($558 million).