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Can Charter Keep Up Its Upward Revenue Trend?

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Charter’s revenue components

Charter Communications’ (CHTR) top line has been improving in the past few quarters. Charter’s total revenue rose ~5.9% YoY (year-over-year) on a pro forma basis to $11.2 billion in the fourth quarter, higher than Wall Street’s consensus expectation of $11.1 billion. The company’s YoY revenue rose mostly due to the ongoing growth in its residential and commercial components.

Charter’s residential services revenue rose ~3.9% YoY to $8.8 billion in the fourth quarter due to impressive growth in its Internet segment. Revenue in its residential services Internet business rose ~7.1% YoY to $3.9 billion in the fourth quarter.

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Charter’s commercial services revenue rose ~4.5% YoY to $1.6 billion in the fourth quarter. Both its Small and Medium Business and Enterprise segments contributed to this growth. The company’s advertising unit revenue rose ~34.1% YoY to $562 million in the fourth quarter. Charter reported mobile revenue of $89 million in the fourth quarter.

Analysts expect Charter to report a ~5.0% rise in revenue to $45.8 billion in 2019 compared to $43.6 billion in 2018. Its adjusted EPS are expected to be $7.88 in 2019 compared to $5.22 in 2018.

Peer comparison

In comparison, Comcast’s (CMCSA) revenue rose ~26.1% YoY on a pro forma basis to $27.8 billion in the fourth quarter. In the integrated US telecommunications space, AT&T’s (T) revenue rose ~15.2% YoY to $48.0 billion, while Verizon’s (VZ) revenue rose ~1.0% YoY to $34.3 billion in the same quarter. Frontier Communications’ (FTR) revenue is expected to fall ~6.0% YoY to $2.1 billion in the same period.

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