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Charter's revenue on the rise

Wed, 08/04/2010 - 8:45am
Mike Robuck

Charter Communications' 4.8 percent increase in second-quarter revenue, which totaled $1.77 billion, was driven by increases in its Internet, phone and commercial customers, as well as a rebound in advertising sales.

Charter's loss in the quarter narrowed to $81 million, or 72 cents per share, compared with a loss a year ago of $112 million, or 30 cents per share. Charter emerged from voluntary Chapter 11 bankruptcy last year; as a result, it had 70 percent fewer shares in the second quarter.

Charter's total average monthly revenue per basic video customer for the second quarter increased 9.4 percent year-over-year to $124, driven by increased sales of bundled services and advanced services.

"We're pleased with our second-quarter results as Charter continues to enhance our products, drive deeper Internet, digital and bundled penetration, and invest for future growth," said Charter President and CEO Mike Lovett. "We're confident that our strategy to strengthen our product and service capabilities while expanding our commercial offerings will further improve our position for long-term success."

As of June 30, Charter served approximately 5.3 million customers, and the company's 12.9 million RGUs comprise 4.7 million basic video, 3.3 million digital video, 3.2 million Internet and 1.7 million phone customers.

Video
While Charter's digital video customers increased by approximately 25,500, it lost 76,000 basic video subscribers in the second quarter, which is typically a seasonally slow quarter for cable operators.

Year-to-date 2010 digital customer additions were six times greater than year-ago net additions due to product and service enhancements. Video ARPU was $68.90 for the second quarter of 2010, up 4.8 percent year-over-year, which Charter said was due to increases in its digital, high-definition and DVR penetration.

Charter's second-quarter video revenues were $932 million, which represented a .04 percent increase, as digital and advanced services revenue growth were offset by the decline in basic video subscribers.

Data
Data was the darling of Charter's earnings report this morning. Charter, the nation's fourth-largest cable operator, said its high-speed data revenue increased by 9.5 percent to $402 million due to subscriber and ARPU growth.

Charter's data subscribers grew by approximately 21,900 during the second quarter, more than doubling the net additions from the second quarter of 2009. Internet ARPU of $42.20 increased approximately 1.9 percent compared with the year-ago quarter. Charter expects continued success with its data offerings going forward, thanks to its residential and commercial deployments of DOCSIS 3.0 tiers, as well as increased demand for home networks.

Phone
Charter added 35,200 new phone subscribers in the second quarter as penetration reached 15.9 percent. The company's phone ARPU of $41.74 decreased approximately 4.2 percent. Telephone revenues for the second quarter were $206 million, an 11 percent increase over the same quarter a year ago.

Commercial services, advertising
Commercial revenues rose to $121 million, a 10 percent increase year-over-year, reflecting increased sales of the Charter business bundle and customer growth.

Advertising sales revenues were $72 million, a 16 percent increase compared with the second quarter of 2009, as a result of improvements across all sectors, primarily the political, automotive and furniture sectors.

Charter's cash flow for the quarter was $127 million, compared with $175 million in the same period last year. Charter said the decrease in free cash flow was primarily due to increases in capital investments to enhance its residential and commercial products and service capabilities.

More Broadband Direct 8/04/10:

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