Investing.com -- Charter Communications (NASDAQ:CHTR) shares fell over 6% in premarket trading on Friday after the U.S. cable and broadband provider reported worsening quarterly Internet subscriber losses and a $6.3 billion franchise writedown, and announced a $2 billion cost-cutting plan to try to return to customer growth.
Charter lost 233,000 Internet customers in the third quarter on a pro forma basis, which treats the Cox Communications deal as if it closed on Jan. 1, 2024, versus a loss of 171,000 a year earlier.
Its pre-merger business lost 156,000 versus 109,000 a year earlier, and the former Cox business lost 77,000.
The $6.3 billion franchise impairment charge drove a net loss attributable to shareholders of $2.4 billion on an actual basis, versus net income of $1.1 billion a year earlier.
Loss per share was $20.50, against earnings of $8.50 a year earlier and an analyst estimate of $9.54 a share.
On a pro forma basis, the net loss was $2.1 billion versus net income of $1.0 billion, with the charge partly offset by a $1.4 billion gain on debt exchanges.
Charter is targeting $2 billion in annualized operating expense savings over the next 18 months, on top of more than $1 billion in expected Cox synergies, by cutting nonessential activities, simplifying its structure and getting more from vendors.
"We are fundamentally rethinking how we operate and compete," chief executive Chris Winfrey said.
Pro forma revenue was $16.51 billion, down 1.5% from a year earlier on lower residential video and Internet revenue, versus a consensus estimate of $13.53 billion. On an actual basis, revenue rose 9.1% to $14.92 billion because of the Cox deal.
Pro forma Internet revenue fell 3.7% to $7.10 billion on fewer customers and changes in pricing and packaging.
Pro forma adjusted EBITDA fell 4% to $6.59 billion from a year earlier, as revenue fell 1.5% and operating costs rose 0.2%.
Excluding $76 million in Cox integration costs, it fell 3%. Other costs of revenue rose 15% on higher mobile device sales, while programming costs fell 10.3%.
Free cash flow was $674 million versus $1.62 billion a year earlier, as operating cash flow fell to $4.03 billion from $4.48 billion on the timing of cash tax payments and one-time Cox deal costs, and accrued capital spending expenses moved unfavorably.
Pro forma capital spending was $3.24 billion versus $3.64 billion a year earlier on lower line extension and infrastructure spending. Charter expects about $13 billion for full-year 2026, excluding Cox transition spending.
Total debt was $108.6 billion at Sept. 30, against $573 million in cash.
Original Article
Charter shares fall 6% in premarket trade as Q3 Internet losses worsen
