Charter Communications, operating under the Spectrum brand, reported better-than-expected earnings for the third quarter. However, revenue fell below analysts’ projections as video customers scaled back their usage. As a result, the stock price has declined.
Strong Earnings Performance
Charter’s earnings per share for the third quarter reached $8.25, surpassing the estimated $8.06 per share predicted by analysts surveyed by FactSet. This positive financial performance showcases Charter’s ability to deliver impressive results.
Revenue Misses Expectations
Despite the strong earnings performance, revenue for the quarter amounted to $13.58 billion, falling short of the projected $13.64 billion. The revenue decline can be attributed to the company’s video division, which experienced an 8.6% decrease compared to the previous year. This decline was caused by a higher proportion of lower-priced video packages within Charter’s customer base. Additionally, the loss of Disney programming in September 2023 led to $63 million in credits for residential customers.
The disappearance of Disney channels from Charter’s Spectrum cable service in early September resulted from ongoing negotiations between the Walt Disney Company and Charter regarding their multiyear distribution agreement. This disruption played a role in a 6% decline in total video customers compared to the same period last year. Some customers chose to cancel their subscriptions due to the loss of Disney content.
These challenges notwithstanding, Charter Communications has demonstrated its ability to deliver strong financial performance. While revenue fell short this quarter, the company’s earnings exceeded expectations, highlighting its resilience in an evolving market.
