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Highlights from Charter’s Q4 Earnings Report


Jan. 31 2020, Published 11:02 a.m. ET

Charter Communications (NASDAQ:CHTR) stock is trending up in today’s trading session. So far, the stock has risen more than 4% as of 9:59 AM ET. The company posted better-than-expected fourth-quarter results before the markets opened. Charter beat analysts’ revenue and earnings estimates in the fourth quarter.

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Charter beat the Q4 estimates

In the fourth quarter, Charter Communications posted an adjusted EPS of $3.38—much higher than analysts’ estimates of $2.48. Notably, the company reported adjusted earnings growth of 162.0% YoY (year-over-year) in the fourth quarter of 2019.

In the fourth quarter, Charter’s revenue rose 4.7% YoY to $11.76 billion—$29 million ahead of Thomson Reuters’ average consensus revenue expectation. The company’s residential services revenue rose 5.7% YoY to $9.3 billion in the fourth quarter. Meanwhile, the company’s commercial services revenue rose 1.8% YoY to $1.6 billion in the quarter. However, Charter’s advertising revenue fell 22.8% YoY to $434 million. In addition, the company reported mobile sales of $236 million.

Customer metrics

Charter’s residential broadband revenues increased by 11.6% YoY to $4.3 billion in the fourth quarter. In the fourth quarter of 2019, the company gained 339,000 net broadband customers—313,000 residential customers and 26,000 business customers. Charter’s total broadband customers increased by 5.6% YoY to 26.7 million at the end of December 31, 2019. In the fourth quarter of 2018, the company gained 329,000 net broadband customers—289,000 residential customers and 40,000 business customers.

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In the fourth quarter of 2019, Charter lost 101,000 net video customers—net losses of 105,000 residential customers and net additions of 4,000 business customers. Despite residential video customer losses, the company’s residential video revenues increased 2.6% YoY to $4.47 billion in the fourth quarter. According to a FierceVideo report, “The company attributed the growth to rate adjustments and promotional roll off which outpaced a decline in video customers, a higher mix of streaming and lighter video packages within its video customer base and lower pay-per-view and video-on-demand revenue.”

The report also said, “As we look to 2020, we remain focused on driving customer growth by offering superior services and value to our customers, improving the efficiency of our operations, and delivering sustainable free cash flow growth, by driving EBITDA growth, while reducing capital intensity.”

In the fourth quarter of 2018, Charter lost 22,000 net video customers—net losses of 36,000 residential customers and net additions of 14,000 business customers. Meanwhile, the company’s total video customers decreased by 2.8% YoY to 16.1 million at the end of December 31, 2019. Charter is losing video subscribers due to competition from streaming services like Amazon Prime Video and Netflix.

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Analysts’ recommendations

Among the 34 analysts tracking Charter stock, 20 recommend a “buy”—down from 21 in the last month. About 13 analysts recommend a “hold”—up from 12 in the last month. Meanwhile, one analyst recommends a “sell”—unchanged from the previous month. According to analysts’ consensus, the stock has a 12-month mean target price of $516.00. The average target price is at a 4.7% premium to the closing price of $492.98 on Thursday. The median target was $525.00 on the same date.

Charter’s stock price movement

Charter Communications stock closed 0.46% higher on Thursday. The stock was trading 4.7% below its 52-week high of $517.07 and 49.0% above its 52-week low of $330.92. At the closing price on Thursday, the company’s market cap was $105.9 billion. On a YTD (year-to-date) basis, the stock has risen about 1.6%.

Based on Thursday’s closing price, Charter was trading as follows:

  • 2.0% below its 20-day moving average of $502.89
  • 1.6% above its 50-day moving average of $485.28
  • 6.5% above its 100-day moving average of $463.06

Charter has a 14-day relative strength index score of 47, which suggests that the stock isn’t overbought or oversold. The stock’s 14-day MACD is -13.35, which suggests a downward trading pattern.

Comcast (NASDAQ:CMCSA) added 442,000 net broadband customers in the fourth quarter, while the company lost 149,000 pay-TV customers. Read Key Takeaways from Comcast’s Q4 Earnings to learn more.


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