uploads///Telecom Charter Q Adjusted EBITDA

What Charter’s Earnings Growth Could Look Like for 1Q18

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Apr. 24 2018, Updated 11:31 a.m. ET

Charter’s EBITDA growth in 1Q18

In the previous part of this series, we learned how much total revenue growth we can anticipate from Charter (CHTR) in 1Q18. Now let’s take a look at the expected consolidated adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) for 1Q18. Wall Street analysts expect Charter’s consolidated adjusted EBITDA to reach ~$3.85 billion.

In 4Q17, Charter reported adjusted EBITDA of $4.0 billion, up from $3.9 billion in 4Q16, which was in line with Wall Street’s expectation. In 4Q17, adjusted EBITDA rose ~1.8% YoY (year-over-year), excluding transition costs in both periods. However, Charter’s adjusted EBITDA margin remained stable on a YoY basis at 37.5% in 4Q17 due to increased operating expenses to support the Spectrum rollout in the acquired footprints. Meanwhile, Charter’s management believes the company will have lots of opportunities to create significant merger synergies across the new Charter Communications footprint as it integrates the legacy Time Warner Cable and legacy Bright House Networks acquisitions.

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Charter’s peers’ EBITDA margins

In 4Q17, integrated US telecom giant Verizon (VZ) reported a consolidated adjusted EBITDA margin of 35.7%. AT&T (T) reported a combined domestic wireless operations EBITDA margin of 32.7% during the quarter. Meanwhile, Frontier’s (FTR) adjusted EBITDA margin was 41.5% in 4Q17.

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