Charter Communications Inc.'s (CHTR) second-quarter loss widened
as the broadband communications operator logged higher debt
extinguishment losses and depreciation and amortization expenses,
although revenue rose, driven by strength in video.
The report comes as Charter Communications, the fifth biggest
cable operator, and its largest shareholder Liberty Media Corp.
(LMCA, LMCB), have been trying to interest Time Warner Cable Inc.
(TWC) in a merger. So far, Time Warner Cable has rebuffed Charter
and Liberty's approaches.
Chief Executive Tom Rutledge has previously said he expects the
cable industry will eventually boil down to two major players. He
has said that being bigger would help cable companies control
costs, giving them more leverage over media companies that supply
TV programming, and would put them on stronger footing to invest in
new technologies.
Charter reported a loss of $96 million, or 96 cents a share,
compared with a year-earlier loss of $83 million, or 84 cents a
share. The latest quarter included an $81 million loss on the
extinguishment of debt and a $20 million gain on derivative
instruments. The year-ago quarter included a $59 million debt
extinguishment loss.
Revenue increased 4.7% to $1.97 billion, in line with the
estimates of analysts polled by Thomson Reuters.
Residential revenue per customer relationship rose 2.5% to
$108.67, driven by rate adjustments, higher product sell-in and
promotional rate step-ups.
The video segment reported revenue growth of 8% to $984
million.
Internet revenue was up 12% to $520 million amid the addition of
262,000 Internet customers. Telephone revenue fell 27%.
Commercial revenue climbed 21%.
Advertising sales revenue of $73 million declined 16%, driven by
a decline in political advertising revenue, which saw strength in
the second quarter of 2012, and from a decline in barter and
contractual revenue.
Depreciation and amortization expense rose 5.1%. Operating costs
and expenses excluding depreciation and amortization rose 7.5% as
costs to service customers increased 14% reflecting higher spending
on labor and preventive plant maintenance.
Programming expense increased 5.4%, reflecting contractual
programming increases, partially offset by customer losses.
Shares closed Monday at $130.15 and were inactive premarket. The
stock has risen 24% in the past three months.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
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