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Charter (CHTR) Q3 Earnings & Revenues Top Estimates, Up Y/Y

Charter Communications CHTR delivered third-quarter 2021 earnings of $6.50 per share, beating the Zacks Consensus Estimate by 14.2%. The reported figure also surged 66.7% year over year.

Revenues of $13.1 billion increased 9.2% on a year-over-year basis, on growth in the Internet, mobile and advertising sales revenues. The revenue figure also topped the consensus mark of $12.93 billion.

Segmental Details

Residential revenues came in at $10.27 billion, up 9.4% from the year-ago quarter.

Monthly residential revenues per customer (excluding mobile) totaled $115.15, up 5.6% year over year.

Internet revenues grew 13.6%, year over year, to $5.36 billion on growth in Internet customers, promotional rate step-ups, rate adjustments and higher bundled revenue allocation.

Video revenues increased 6.7% to $4.5 billion driven by rate adjustments and promotional rate step-ups.

Meanwhile, voice revenues decreased 8.8% to $409 million.

Commercial revenues improved 7.1% year over year to $1.72 billion on solid SMB and enterprise revenue growth. Small and medium business revenues came in at $1.06 billion, up 7.5% year over year, reflecting customer relationship growth.

Enterprise revenues were up 6.4% to $656 million.

The third-quarter advertising sales revenues of $391 million slid 15.1% year over year.

Mobile revenues climbed 45.4%, year over year, to $535 million. Other revenues came in at $228 million, up 6.5% year over year.

Subscriber Statistics

As of Sep 30, 2021, Charter had 31.95 million total customer relationships, with 1.01 million net new customer relationships added over the last 12 months.

Furthermore, the company had 28 million residential Internet customers, up 4.3% year over year.

Charter added 243K residential Internet customers in the reported quarter.

Further, Charter added 230K mobile lines in the September-end quarter. As of Sep 30, 2021, the company served a total of 3.09 million mobile lines.

As of Sep 30, 2021, Charter had 15.89 million residential video customers. However, the company lost 216K voice customers from the year-ago quarter.

Operating Details

Total operating costs and expenses flared up 6.2% from the year-ago quarter to $7.86 billion.

Programming costs shot up 9.4% year over year to $2.98 billion on a rise in renewals and contractual programming. Regulatory, connectivity and produced-content costs were up 3.5% to $634 million.

Costs to service customers edged down 0.2%, year over year, to $1.9 billion. Marketing costs were $788 million, flat, year over year.

Notably, mobile costs jumped 33.2% year over year to $607 million.

The adjusted EBITDA increased 13.9% year over year to $5.29 billion. Moreover, the adjusted EBITDA margin expanded 170 basis points (bps) to 40.2%.

Balance Sheet & Cash Flow

As of Sep 30, 2021, cash and cash equivalents were $466 million compared with $1.71 billion as of Jun 30, 2021. The company’s credit facilities provided roughly $3.2 billion of additional liquidity.

Further, as of Sep 30, 2021, total debt was $87.9 billion compared with debt of $87.5 billion as of Jun 30, 2021.

Cash flows from operating activities totaled $4.3 billion compared with the year-ago quarter’s $3.7 billion.

Property, plant and equipment expenditures totaled $1.86 billion in the reported quarter.

Free cash flow was $2.5 billion compared with the year-earlier quarter’s $1.8 billion.

Zacks Rank & Stocks to Consider

Charter currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Applied Materials AMAT, Advanced Micro Devices AMD and CACI International CACI, all carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rate for Applied Materials, Advanced Micro Devices and CACI is currently pegged at 19.4%, 44.6% and 5.5%, respectively.

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