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Charter Communications, Inc. (NYSE: CHTR) announced its financial results for the third quarter of 2024, showcasing a strong performance across its service offerings. The company’s total revenue for the quarter was $13.8 billion, reflecting a 1.6% increase year-over-year.

This growth was primarily driven by a substantial 37.6% increase in residential mobile service revenue and a modest 1.7% rise in residential Internet revenue. However, the company faced challenges with its Internet customer base, which decreased by 110,000, bringing the total number of Internet customers to 30.3 million as of September 30, 2024.

In contrast, Charter saw a notable increase in its mobile lines, adding 545,000 new lines during the quarter, resulting in a total of 9.4 million mobile lines. The company’s total customer relationships, excluding mobile-only relationships, stood at 31.7 million. Despite these gains in mobile services, Charter experienced a decline in its video and voice customer base, with video customers decreasing by 294,000 and voice customers by 288,000.

Financially, Charter reported a net income attributable to shareholders of $1.3 billion, a 2.0% increase from the previous year. The company’s Adjusted EBITDA grew by 3.6% year-over-year to $5.6 billion, while capital expenditures saw a reduction, totaling $2.6 billion. Free cash flow for the quarter improved significantly, reaching $1.6 billion, up from $1.1 billion in the prior year.

Charter Reports Better than Expected Q3

Charter’s third-quarter performance surpassed Wall Street expectations. Analysts had anticipated earnings per share (EPS) of $8.67 and revenue of $13.66 billion. Charter exceeded these expectations, reporting $13.8 billion, and an EPS of $8.82, demonstrating strong profitability. The company’s revenue growth was largely driven by its residential mobile services, which outperformed expectations with a 37.6% increase.

However, the decline in Internet customers was a point of concern, as it contradicted the broader industry trend of increasing connectivity demand. The end of the FCC’s Affordable Connectivity Program was cited as a contributing factor to this decline. Despite the reduction in Internet customers, Charter’s Internet revenue still grew by 1.7% due to rate adjustments and promotional rate step-ups.

Charter’s video and voice services continued to experience customer losses, reflecting the ongoing shift in consumer preferences towards streaming and mobile communication solutions. The company’s strategic focus on its mobile services and the introduction of new pricing strategies, such as the Life Unlimited brand platform, are expected to counterbalance these declines in the future.

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Charter Adjusts Capital Expenditure Guidance for Full Year 2024

Charter has adjusted its capital expenditure guidance for the full year 2024. The company now expects total capital expenditures to be approximately $11.5 billion, a decrease from the previous estimate of $12.0 billion. This revision is primarily due to lower expected spending on network evolution and line extensions, partially offset by increased spending on plant restoration following recent hurricanes. Charter anticipates that its network evolution spend will be around $1.1 billion, down from the prior expectation of $1.6 billion.

Charter remains committed to expanding its network and bringing Spectrum Internet to underserved communities. During the third quarter, the company activated 114,000 subsidized rural passings, contributing to an increase of 41,000 customer relationships within its subsidized rural footprint.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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