Charter's Network Upgrade Weighs On Q4 Cash Flows; Misses Consensus After Clocking 4% Revenue Growth

Charter Communications, Inc CHTR reported fourth-quarter FY22 revenue growth of 3.5% year-on-year to $13.67 billion, narrowly missing the consensus of $13.72 billion.
Revenue growth of 0.4% in Residential, 38.7% in Mobile, and 24.6% in Advertising sales drove the top-line performance.
Residential Internet customers increased by 92,000, compared to an increase of 172,000 customers last year.
Residential video customers decreased by 145,000 versus 71,000 declines in the prior year.
Q4 programming costs decreased by $95 million, or 3.3%, reflecting fewer video customers and a higher mix of lower-cost packages within Charter's video customer base, partly offset by contractual programming rate increases and renewals.
Margin: Adjusted EBITDA margin contracted by 60 bps to 40.1%.
EPS of $7.69 missed the consensus of $8.79.
As of December 31, Charter served 30.4 million residential and SMB Internet customers.
Free cash flow totaled $1.14 billion, down by 50.3% Y/Y, primarily due to the capex associated with Charter's rural construction initiative. The company held $645 million in cash and equivalents.
Last December, Charter shared plans to spend $5.5 billion on its network to introduce higher-speed broadband connections.
Price Action: CHTR shares traded lower by 3.04% at $397.90 in the premarket on the last check Friday.
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