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Charter Communications Misses Q4 Earnings as Pay-TV Subscriptions Drop

The cable giant posted net income of $1.2 billion, or $7.69 per diluted share, on revenue of $13.7 billion

Charter Communications missed Wall Street earnings expectations for the fourth quarter of 2022 on Friday, reporting net income of $1.2 billion, or $7.69 per diluted share, as its pay-TV business continued to decline

Total revenue for the quarter grew 3.5% year over year to $13.7 billion, driven by growth in mobile, advertising sales and commercial revenues.

Residential revenue totaled $10.3 billion in the fourth quarter, an increase of 0.4% year-over-year, while commercial revenue climbed 3.3% year-over-year to $1.8 billion. Internet revenue grew 3.9% year-over-year to $5.6 billion and mobile revenue grew 38.7% to $876 million, while video revenue fell 3.5% to $4.3 billion and voice revenue fell by 4.3% to $379 million. Fourth quarter advertising sales revenue grew 24.6% to $558 million, primarily driven by higher political revenue.

The company said it benefited from “rate adjustments” in its residential business, offset by a ”higher mix of lower priced video packages within Charter’s video customer base.”

Fourth quarter adjusted EBITDA grew 1.9% year-over-year to $5.5 billion.

Analysts were expecting Charter to post earnings of $8.79 per share and revenue of $13.73 billion, according to a Refinitiv survey.

The cable giant’s total customer relationships climbed to nearly 32.2 million following 54,000 net additions in the quarter, down from 120,000 net additions during the same period a year ago.

Charter saw an increase of 105,000 total residential and small and medium business internet customers, compared to an increase of 190,000 during the same period a year ago, and 615,000 total residential and SMB mobile lines, compared to an increase of 380,000 during the fourth quarter of 2021.

Meanwhile, total residential and SMB video customers decreased by 144,000 during the quarter, compared to a decline of 58,000 in the fourth quarter of 2021, and total residential and SMB wireline voice customers fell by 233,000, compared to a decline of 154,000 during the same period a year ago.

As of Dec. 31, Charter served a total of 30.4 million residential and business internet customers and 5.3 million mobile lines, with 344,000 total internet customers and 1.7 million mobile lines added in 2022. It also had a total of 14.5 million residential video customers and 7.7 million residential wireline voice customers.

“We continued to execute well in 2022, growing customer relationships, revenue and EBITDA,” Charter president and CEO Chris Winfrey said in statement. “In 2023 and the coming years, we remain focused on three core initiatives — network evolution, footprint expansion and operational execution. Each of these initiatives will deliver benefits for a growing base of customers, our employees and local communities, with long-term value creation for our shareholders.”