Charter Rises Most Since 2009 as Video Sales Top Estimates
(Updates with closing shares in fifth paragraph.)
Feb. 22 (Bloomberg) -- Charter Communications Inc., the fourth-largest U.S. cable operator, rose the most in more than three years as higher prices helped boost video revenue.
TV-service sales advanced 2.8 percent to $927 million, topping ISI Group’s estimate of $894 million. Charter lost 36,000 residential video customers in the quarter, an improvement from 44,000 a year ago.
Charter is reviving attempts to encourage customers to add Internet and phone service to their TV plans for a so-called triple-play package, Vijay Jayant, an analyst at ISI Group in New York, said in a note to clients.
“The company is in the midst of a transition with new pricing and packaging that promotes triple-play offerings, which have started to get a penetration lift,” Jayant said.
Charter rose $7.99, or 10 percent, to $85.02 at the close in New York, its largest one-day gain since emerging from bankruptcy in 2009. The shares have gained 12 percent this year, compared with a 6.3 percent gain for the Standard & Poor’s 500 Index.
Charter connected 36 percent of new video subscribers to a triple-play package in the quarter, a “significant improvement,” Chief Executive Officer Tom Rutledge said on a conference call. That rate rose to 50 percent “in the past few weeks,” he said.
Rutledge has retooled management and moved corporate headquarters from St. Louis to Stamford, Connecticut, since replacing Mike Lovett last year. He agreed to buy Cablevision Systems Corp.’s Optimum West unit for $1.63 billion earlier this month, a sign he’s committed to increasing Charter’s competitive position throughout the U.S.
“After a year at Charter, we’re where I expected us to be at this stage,” Rutledge said. “Our organizational proficiency continues to improve.”
Charter’s fourth-quarter net loss narrowed to $40 million, or 41 cents a share, from $67 million, or 63 cents, a year earlier, the company said today in a statement. Sales rose 4.3 percent to $1.91 billion, in line with the average analyst estimate, according to data compiled by Bloomberg.
The company added 54,000 residential broadband subscribers. Average revenue per customer was $105.78.
--Editors: Crayton Harrison, Niamh Ring