Charter Communications Q2 Sees Subscriber Loss On ACP Expiry, Still Beats Expectations (UPDATED)

Editor’s Note: The title has been updated to correct the typo

Charter Communications Inc CHTR reported fiscal second-quarter 2024 revenue growth of 0.2% year-on-year to $13.69 billion, beating the analyst consensus estimate of $13.59 billion.

EPS of $8.49 beat the analyst consensus estimate of $7.95. The stock price gained after the results.

Revenue growth of 1.3% in Internet, 36.9% in Mobile service, and 2.1% in Commercial aided the top line.

Charter lost 154,000 residential Internet customers, largely driven by the end of the FCC's Affordable Connectivity Program ("ACP") subsidies, compared to 70,000 additions last year. Residential video customers decreased by 393,000 versus a decrease of 189,000 in the prior year.

Adjusted EBITDA margin expanded by 100 bps to 41.4%. 

The quarterly free cash flow of $1.3 billion improved from $668 million in the prior year, primarily due to higher net cash flows from operating activities. 

As of June 30, 2024, Charter served 30.4 million residential and SMB Internet customers. 

Net cash flow from operating activities totaled $3.9 billion. The company held $602 million in cash and equivalents as of June 30, 2024.

Outlook: Charter Communications expects a 2024 capex of $12.0 billion (prior $12.2 billion – $12.4 billion).

The company's 2024 revenue and EPS consensus are $54.52 billion and $32.53.

Charter Communication stock has lost over 20% in the last 12 months. Earlier in July, Citigroup downgraded the stock rating, citing a challenging organic broadband environment. The analyst expected the second-quarter and third-quarter results to highlight the headwinds on broadband pricing and volumes.

CHTR Price Action: Charter Communications shares traded higher by 7.54% at $339.01 premarket at the last check on Friday.

Photo via Company