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Charter Communications (CHTR) Q2 Earnings Beat, Revenues Up Y/Y

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Charter Communications CHTR delivered second-quarter 2022 earnings of $8.80 per share, beating the Zacks Consensus Estimate by 27.2% and our estimate of $7.71 per share.

The reported figure surged 66.4% year over year.

Revenues of $13.598 billion increased 6.2% on a year-over-year basis, owing to the Internet, mobile and advertising sales growth.

The top line missed the consensus mark by 1.3% but beat our estimate of $13.34 billion.

Charter Communications, Inc. Price, Consensus and EPS Surprise

Charter Communications, Inc. Price, Consensus and EPS Surprise
Charter Communications, Inc. Price, Consensus and EPS Surprise

Charter Communications, Inc. price-consensus-eps-surprise-chart | Charter Communications, Inc. Quote

Segmental Details

Residential revenues came in at $10.44 billion, up 4.5% year over year. The figure beat our estimates of $10.25 billion and the Zacks Consensus Estimate by 1.60%.

Monthly residential revenues per customer (excluding mobile) totaled $113.28, up 1% year over year.

Internet revenues rose 6.5% year over year to $5.56 billion. The figure beat our estimate of $5.51 billion and the consensus mark by 0.39%.

Video revenues climbed 2.4% to $4.48 billion. Voice revenues increased 1% to $398 million.

Commercial revenues rose 4.2% year over year to $1.75 billion.

Small and medium business revenues came in at $1.08 billion, up 3.7% year over year, reflecting customer relationship growth.

Enterprise revenues were up 4.9% year over year to $669 million.

Advertising sales increased 12% year over year to $460 million.

Mobile revenues surged 39.8% year over year to $726 million.

Other revenues came in at $219 million, up 8.8% year over year.

Subscriber Statistics

As of Jun 30, 2022, Charter had 32.124 million total customer relationships, up 1.1% year over year.

The company had 30.253 million Internet customers, up 2.1% year over year. Charter lost 21K Internet customers in the reported quarter.

Currently, 300 Mbps is the minimum speed offered to new Spectrum Internet customers across Charter's footprint. As of Jun 30, 2022, over 80% of total Internet customers subscribed to tiers that provided 300 Mbps or more of speed. Charter also offers Spectrum Internet Ultra (500 Mbps) and Spectrum Internet Gig (1 Gbps) across its entire footprint.

Charter added 344K mobile lines in the June-end quarter. As of Jun 30, 2022, the company has served a total of 4.28 million mobile lines.

As of Jun 30, 2022, Charter had 15.495 million video customers, down 3.2% year over year. However, the company lost 226K video customers in the reported quarter.

Moreover, Charter had 9.49 million voice customers, down 7.6% year over year. The company lost 266K video customers in the reported quarter.

Operating Details

Total operating costs and expenses increased 3.9% from the year-ago quarter to $8.09 billion.

Programming costs dropped 0.2% year over year to $2.97 billion. Regulatory, connectivity and produced-content costs were down 10.3% to $599 million.

Costs to service customers inched up 5.1% year over year to $1.92 billion. Marketing costs were $806 million, up 8.6% year over year.

Notably, mobile costs jumped 35.9% year over year to $797 million.

Adjusted EBITDA increased 9.7% year over year to $5.51 billion.

Balance Sheet & Cash Flow

As of Jun 30, 2022, cash and cash equivalents were $483 million compared with $2.43 billion as of Mar 31, 2022.

As of Jun 30, 2022, the total debt was $96 billion compared with $95.2 billion as of Mar 31, 2022.

Cash flows from operating activities totaled $3.7 billion compared with the previous quarter’s $3.6 billion.

Free cash flow was $1.7 billion compared with the previous quarter’s $1.8 billion.

In the reported quarter, Charter repurchased 8.3 million shares of Charter Class A common stock and Charter Communications Holdings, LLC common units for approximately $4.3 billion.

Zacks Rank & Stocks to Consider

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

Take-Two Interactive TTWO, DraftKings DKNG and Universal Technical Institute UTI are some better-ranked stocks that investors can consider in the broader sector. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Take-Two Interactive is set to announce first-quarter fiscal 2022 results on Aug 8. TTWO shares have been down 26.3% year to date.

DraftKings is set to announce second-quarter 2022 results on Aug 5. DKNG shares have been down 51.5% year to date.

Universal is set to announce third-quarter fiscal 2022 results on Aug 3. UTI shares have been up 1.9% year to date.


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