Impairment charge sinks Charter’s Q3
Charter Communications improved some of its key operating statistics, but it took a large one-time charge and posted a loss in its third quarter as it continues to wrangle with its enormous debt.
The company’s sojourn in Chapter 11 might last for only a few weeks more; a judge’s ruling on the company’s reorganization plan – contested by some of its key investors – is imminent.
Third-quarter revenue of $1.69 billion was up 3.5 percent, which the company said was driven by increases in telephone, high-speed Internet and commercial revenues.
Charter said that the economic downturn forced it to pull in on its 2008 estimates of future growth, in turn forcing the company to take an impairment charge of more than $2.8 billion in the quarter. That charge was partially offset by a one-time tax gain.
With that charge, Charter reported $2.5 billion of loss from operations in the third quarter of 2009, compared with $208 million of income from operations in the third quarter of 2008.
Total average monthly revenue per basic video customer (ARPU) for the quarter increased 8.2 percent year-over-year to $115.26, driven by increased sales of The Charter Bundle.
Charter’s basic video customer count decreased by approximately 46,500 during the third quarter, while digital video customers increased by approximately 22,800. The company added about 52,400 broadband subs, and about 55,300 VoIP customers.
Charter said that as of Sept. 30, it served approximately 5.3 million customers, representing 12.6 million RGUs (4.9 million basic video, 3.2 million digital video, 3.0 million HSI and 1.5 million telephone customers).
Expenditures for property, plant and equipment for the third quarter of 2009 were $279 million, compared with third-quarter 2008 expenditures of $288 million.