Charter's Network Upgrade Weighs On Q4 Cash Flows; Misses Consensus After Clocking 4% Revenue Growth

  • Charter Communications, Inc CHTR reported fourth-quarter FY22 revenue growth of 3.5% year-on-year to $13.67 billion, narrowly missing the consensus of $13.72 billion.
  • Revenue growth of 0.4% in Residential, 38.7% in Mobile, and 24.6% in Advertising sales drove the top-line performance.
  • Residential Internet customers increased by 92,000, compared to an increase of 172,000 customers last year.
  • Residential video customers decreased by 145,000 versus 71,000 declines in the prior year.
  • Q4 programming costs decreased by $95 million, or 3.3%, reflecting fewer video customers and a higher mix of lower-cost packages within Charter's video customer base, partly offset by contractual programming rate increases and renewals.
  • Margin: Adjusted EBITDA margin contracted by 60 bps to 40.1%.
  • EPS of $7.69 missed the consensus of $8.79.
  • As of December 31, Charter served 30.4 million residential and SMB Internet customers.
  • Free cash flow totaled $1.14 billion, down by 50.3% Y/Y, primarily due to the capex associated with Charter's rural construction initiative. The company held $645 million in cash and equivalents.
  • Last December, Charter shared plans to spend $5.5 billion on its network to introduce higher-speed broadband connections.
  • Price Action: CHTR shares traded lower by 3.04% at $397.90 in the premarket on the last check Friday.
  • Photo Via Company
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