uploads///Telecom Charter Q Adjusted EBITDA

A Look at Charter Communications’ Earnings Growth in 4Q17

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Dec. 4 2020, Updated 10:50 a.m. ET

Charter Communications’ EBITDA growth in 4Q17

In the previous part of this series, we saw how much total revenue growth we can expect from Charter Communications (CHTR) in 4Q17. In this part, let’s take a look at the expected consolidated adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] of the telecom company. 

Wall Street analysts expect Charter Communications’ consolidated adjusted EBITDA to reach ~$4.0 billion in 4Q17.

In 3Q17, Charter Communications (CHTR) reported adjusted EBITDA of $3.8 billion, compared to $3.6 billion in 3Q16. However, it missed Wall Street analysts’ consensus expectations of ~$4.0 billion. 

Fewer customers, increased operating costs to support the Spectrum rollout in the acquired footprints, and storm-related costs all drove adjusted CHTR’s EBITDA below analysts’ expectations.

In 3Q17, the company’s adjusted EBITDA increased ~4.7% YoY (year-over-year), excluding transition costs in both periods. Charter Communications’ adjusted EBITDA margin was 36.5% in 3Q17, up from 36.2% in 3Q16.

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Peer comparisons

In 3Q17, integrated US telecom giant Verizon (VZ) reported a consolidated adjusted EBITDA margin of 36.7%. AT&T (T) reported a combined domestic wireless operations EBITDA margin of 42.0% during the quarter. Frontier Communications’ (FTR) adjusted EBITDA margin was 40.6% in 3Q17.

Charter Communications’ management expects its adjusted EBITDA to grow, reflecting solid cost management and the company’s improved outlook for merger synergies.

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