Why Is Charter Communications Stock Trading Lower Friday?

Charter Communications, Inc CHTR reported fourth-quarter FY23 revenue growth of 0.3% year-on-year to $13.711 billion, beating the consensus of $13.699 billion.

EPS of $7.07 missed the consensus of $8.73. The stock price dropped after the results.

Revenue growth of 3.0% in Internet, 35.7% in Mobile service, and 0.9% in Commercial aided the top line.

Charter lost (62,000) residential Internet customers, compared to 92,000 additions last year. Residential video customers decreased by (248,000) versus a decrease of (145,000) in the prior year, partly driven by video disconnects related to the temporary loss of Walt Disney Company DIS programming.

Adjusted EBITDA margin expanded by 50 bps to 40.6%. 

The quarterly free cash flow of $1.06 billion decreased from $1.14 billion in the prior year, primarily due to higher capital expenditures, driven mainly by Charter’s network evolution and expansion initiatives. 

As of December 31, Charter served 30.59 million residential and SMB Internet customers. 

Net cash flow from operating activities totaled $3.86 billion. The company held $709 million in cash and equivalents.

“Our rural footprint expansion is exceeding our deployment and penetration targets,” said Chris Winfrey, President and CEO of Charter. 

Outlook: Charter Communications expects a 2024 Capex of $12.2 billion – $12.4 billion versus the actual of $11.1 billion in FY23.

Price Action: CHTR shares traded lower by 9.24% at $347.00 premarket on the last check Friday.

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