uploads///Telecom Charters Revenue

What Are the Growth Expectations for Charter’s Revenue in 1Q16?


Apr. 25 2016, Updated 4:09 p.m. ET

Charter’s revenue in 1Q16

In the previous part of this series, we looked at expectations by Wall Street analysts for Charter Communications’ (CHTR) losses as well as core operating earnings for 1Q16. Now let’s move to the top line. Wall Street anticipates the year-over-year (or YoY) growth momentum in Charter’s revenue to continue during the quarter.

According to the analysts’ consensus, Charter’s revenue is expected to grow by ~7.3% YoY to ~$2.5 billion for the quarter. In 4Q15, the cable company’s revenue rose by ~6.4% YoY.

Now let’s move to the consensus versus actual revenue performance of the cable company in the recent quarters. As we can observe in the above chart, the cable player’s revenue was close to the analysts’ consensus revenue figures in each quarter of 2015.

The positive or negative surprise for the analysts regarding Charter’s revenue figures was in the range of -0.5% to ~0.5% in each quarter of 2015.

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Charter’s revenue in 4Q15

During 4Q15, Charter’s Internet component continued to drive the revenue growth of its residential services. Charter’s Residential revenue increased by ~7.2% YoY to ~$2.1 billion during the quarter. Meanwhile, the Residential Internet component’s revenue rose by ~16.6% YoY to ~$0.78 billion.

The Commercial component also continued to drive overall revenue growth of Charter in 4Q15. Charter’s Commercial segment revenue increased by ~12.3% YoY to ~$0.29 billion during the quarter. Both small and medium businesses, as well as the enterprise components, contributed to the growth of Charter’s Commercial segment revenue during 4Q15.

For a diversified exposure to some of the largest cable companies in the US, you may consider investing in the SPDR S&P 500 ETF (SPY). SPY held a total of ~1.2% in Comcast (CMCSA), Time Warner Cable (TWC), and Cablevision (CVC) at the end of March 2016.


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