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Charter Communications (CHTR) Up 1.8% Since Earnings Report: Can It Continue?
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About a month has gone by since the last earnings report for Charter Communications, Inc. (CHTR - Free Report) . Shares have added about 1.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Charter Communications Q3 Earnings Miss Estimates
Charter Communications reported disappointing financial results in third-quarter 2017, wherein both the top and the bottom line lagged the Zacks Consensus Estimate.
Net Income
GAAP net income in the reported quarter was $48 million compared with net income of $189 million in the year-ago quarter. Quarterly earnings of 19 cents per share were well below the Zacks Consensus Estimate of $1.04.
Revenue
Third-quarter 2017 total revenues of $10,458 million increased 4.2% year over year but missed the Zacks Consensus Estimate of approximately $10,485 million.
Residential segment revenues came in at $8,380 million compared with $8,028 million in the year-ago quarter. Within the Residential segment, Video revenues totaled $4,213 million, up 2.9% year over year. Internet revenues came in at $3,556 million, increasing 10.9% from the prior-year quarter, while Voice revenues were $611 million, declining 16.1% year over year.
Commercial segment revenues totaled $1,484 million, reflecting an increase of 8% year over year. Within the Commercial segment, small and medium business revenues were $931 million, up 7.4% year over year. Enterprise revenues came in at $553 million, increasing 8.9% on a year-over-year basis.
Advertising revenues were $373 million, declining 11.1% year over year. Other revenues came in at $221 million, increasing 3% year over year.
Operating Metrics
Quarterly operating costs and expenses were $6,639 million compared with $6,401 million in the year-ago quarter. Third-quarter adjusted EBITDA was $3,819 million compared with $3,636 million in the year-ago quarter. EBITDA margin came in at 36.5% compared with 36.2% in third-quarter 2016.
Cash Flow and Liquidity
In the third quarter of 2017, Charter Communications generated $2,908 million of cash from operations compared with $2,801 million a year ago. Free cash flow in the reported quarter was $594 million compared with $1,001 million in the year-ago quarter.
At the end of the reported quarter, Charter Communications had $2,164 million of cash and cash equivalents and $68,132 million of outstanding debt compared with $1,535 million and $62,464 million, respectively, at the end of 2016. The debt-to-capitalization ratio at the end of the reported quarter was 0.61 compared with 0.54 at the end of 2016.
Subscriber Statistics
Residential Segment: As of Sep 30, 2017, Charter Communications’ residential high-speed Internet subscribers increased 249,000 to 22.282 million. Voice subscribers grew 27,000 to 10.405 million. However, video subscribers decreased 104,000 to 16.542 million.
Monthly residential revenues per customer were $110.12 compared with $109.70 in the prior-year quarter. Single Play penetration was 40.7%, Double Play penetration was 25.3% and Triple Play penetration was 34%.
Commercial Segment: As of Sep 30, 2017, Charter Communications had 440,000 video, 1,321,000 high-speed Internet and 881,000 voice subscribers. During the reported quarter, the company added 15,000 video customers, 36,000 high-speed Internet and 34,000 voice customers. Monthly small and medium business revenues per customer were $206.64 compared with $214.53 in the prior-year quarter. Enterprise customers were 0.108 million, increasing 16.1% year over year.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
VGM Scores
At this time, the stock has an average Growth Sore of C, though it is lagging a lot on the momentum front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision also indicates a downward shift. The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Charter Communications (CHTR) Up 1.8% Since Earnings Report: Can It Continue?
About a month has gone by since the last earnings report for Charter Communications, Inc. (CHTR - Free Report) . Shares have added about 1.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Charter Communications Q3 Earnings Miss Estimates
Charter Communications reported disappointing financial results in third-quarter 2017, wherein both the top and the bottom line lagged the Zacks Consensus Estimate.
Net Income
GAAP net income in the reported quarter was $48 million compared with net income of $189 million in the year-ago quarter. Quarterly earnings of 19 cents per share were well below the Zacks Consensus Estimate of $1.04.
Revenue
Third-quarter 2017 total revenues of $10,458 million increased 4.2% year over year but missed the Zacks Consensus Estimate of approximately $10,485 million.
Residential segment revenues came in at $8,380 million compared with $8,028 million in the year-ago quarter. Within the Residential segment, Video revenues totaled $4,213 million, up 2.9% year over year. Internet revenues came in at $3,556 million, increasing 10.9% from the prior-year quarter, while Voice revenues were $611 million, declining 16.1% year over year.
Commercial segment revenues totaled $1,484 million, reflecting an increase of 8% year over year. Within the Commercial segment, small and medium business revenues were $931 million, up 7.4% year over year. Enterprise revenues came in at $553 million, increasing 8.9% on a year-over-year basis.
Advertising revenues were $373 million, declining 11.1% year over year. Other revenues came in at $221 million, increasing 3% year over year.
Operating Metrics
Quarterly operating costs and expenses were $6,639 million compared with $6,401 million in the year-ago quarter. Third-quarter adjusted EBITDA was $3,819 million compared with $3,636 million in the year-ago quarter. EBITDA margin came in at 36.5% compared with 36.2% in third-quarter 2016.
Cash Flow and Liquidity
In the third quarter of 2017, Charter Communications generated $2,908 million of cash from operations compared with $2,801 million a year ago. Free cash flow in the reported quarter was $594 million compared with $1,001 million in the year-ago quarter.
At the end of the reported quarter, Charter Communications had $2,164 million of cash and cash equivalents and $68,132 million of outstanding debt compared with $1,535 million and $62,464 million, respectively, at the end of 2016. The debt-to-capitalization ratio at the end of the reported quarter was 0.61 compared with 0.54 at the end of 2016.
Subscriber Statistics
Residential Segment: As of Sep 30, 2017, Charter Communications’ residential high-speed Internet subscribers increased 249,000 to 22.282 million. Voice subscribers grew 27,000 to 10.405 million. However, video subscribers decreased 104,000 to 16.542 million.
Monthly residential revenues per customer were $110.12 compared with $109.70 in the prior-year quarter. Single Play penetration was 40.7%, Double Play penetration was 25.3% and Triple Play penetration was 34%.
Commercial Segment: As of Sep 30, 2017, Charter Communications had 440,000 video, 1,321,000 high-speed Internet and 881,000 voice subscribers. During the reported quarter, the company added 15,000 video customers, 36,000 high-speed Internet and 34,000 voice customers. Monthly small and medium business revenues per customer were $206.64 compared with $214.53 in the prior-year quarter. Enterprise customers were 0.108 million, increasing 16.1% year over year.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
VGM Scores
At this time, the stock has an average Growth Sore of C, though it is lagging a lot on the momentum front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision also indicates a downward shift. The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.