Charter Communications (CHTR) Outperforms in Q3 2024, Boosted by Internet and Mobile Growth
Charter Communications Inc., a leading telecommunications company, delivered impressive results for the third quarter of 2024, surpassing analyst expectations. The company reported a 1.6% year-on-year revenue growth, reaching $13.8 billion, exceeding the anticipated $13.7 billion. Earnings per share (EPS) also came in strong at $8.82, beating the analyst consensus estimate of $8.67. The positive news was reflected in the stock price, which saw a significant gain following the announcement.
The revenue growth was primarily driven by strong performances in the Internet and Mobile segments. Internet service revenue saw a 1.7% increase, while Mobile service revenue surged by a remarkable 37.6%. The Commercial segment also contributed to the top line with a 2.0% growth. Despite these positive developments, Charter experienced a decline in residential Internet customers, attributed to the end of the FCC’s Affordable Connectivity Program (“ACP”) subsidies. The company lost 110,000 residential Internet customers, a stark contrast to the 63,000 additions recorded in the previous year. The trend continued with residential video customers, where a decrease of 294,000 was observed compared to 327,000 in the prior year. However, the company saw significant growth in its Mobile subscriber base, adding 545,000 lines during the quarter, bringing the total mobile lines to 9.4 million.
Charter’s financial performance was further strengthened by an expansion in Adjusted EBITDA margin, increasing by 80 basis points to 40.9%. Additionally, the quarterly free cash flow reached $1.6 billion, a notable improvement from the $1.1 billion recorded in the previous year. This positive change was largely due to lower capital expenditures.
As of September 30th, Charter served a substantial customer base of 30.3 million residential and SMB Internet customers. The company generated a robust net cash flow from operating activities, totaling $3.9 billion. Furthermore, Charter held a strong cash position with $721 million in cash and equivalents as of September 30th, 2024.
CEO Chris Winfrey
expressed his confidence in the company’s future, stating, “We have pricing and packaging that saves customers money with the best products and a service capability and investment that has yet to be fully realized as a competitive advantage.”Outlook
Looking ahead, Charter Communications anticipates a 2024 capital expenditure (capex) of $11.5 billion, slightly lower than the previous estimate of $12.0 billion.
CHTR Price Action
Charter Communications stock experienced a positive reaction to the earnings report, rising by 5.9% to $347.00 in premarket trading on Friday.
