It’s a sure sign that the cable industry in general is on the upswing when one of its weakest companies posts strong quarterly results. St. Louis, MO-based cable company Charter Communications issued its Q1 06 earnings report this morning showing gains virtually across the board, including growth in its basic subscriber count, the first such uptick for Charter in a very long time.
Total revenues advanced 8.1% year-over-year to $1.374 billion. Cash flow, however, dropped by .8% to $471 million due to increased operating expenses — the only less-than-positive result posted by Charter.
Charter actually managed to add 28,500 net new basic subscribers during the quarter, a byproduct, no doubt, of the growing attractiveness of the triple-play bundle offered by the operator. In particular, Charter’s telephony customer count soared by 69,600 during the quarter, reaching a total of 191,000 or 4.9% of the capable homes by quarter’s end.
During Charter’s earnings call, COO Mike Lovett said that two-thirds of the phone customers buy all three services — voice, video and data — and that three-fourths of new phone customers coming on board opt for the triple-play package.
High-speed data growth also surged during the quarter, with Charter gaining 126,000 net new modem subscribers, a run-rate 34% higher than the 94,000 net new high-speed customers added during Q1 05. By quarter’s end, Charter counted 2.3 million total high-speed data customers.
Digital penetration also jumped during the quarter, with the company adding 69,800 net new digital customers, a run-rate 251% higher than the 19,900 net new digital customers added during the year-ago quarter. By quarter’s end, Charter served 2.866 million digital subscribers, representing 49% of basic customers.
During the earnings call, Charter executives didn’t really pinpoint exactly why the picture has suddenly brightened for the operator, although it’s clear that the addition of telephony is helping not only Charter but other cable companies as well. CEO Neil Smit simply said “we sold more products to more customers at higher prices.”
| Charter Operational Statistics | |||
| Subscribers and Penetration | 1Q05 | 4Q05 | 1Q06 |
| Homes Passed | 12,214,900 | 12,519,300 | 12,582,100 |
| Basic subscribers | 5,984,800 | 5,884,500 | 5,913,000 |
| Basic penetration | 49% | 47% | 47% |
| Monthly Analog Rev./Sub. | $ 37.80 | $ 37.66 | $ 37.97 |
| Total Customer Relationships | 6,226,500 | 6,157,200 | 6,201,600 |
| Total Revenue Generating Units | 10,713,100 | 10,999,000 | 11,293,800 |
| Digital Cable | 1Q05 | 4Q05 | 1Q06 |
| Digital-ready homes | 12,104,600 | 12,427,800 | 12,493,100 |
| Digital customers | 2,694,600 | 2,796,600 | 2,866,400 |
| Quarterly net sub adds | 19,900 | 47,200 | 69,800 |
| Digital penetration of total subs | 45% | 48% | 48% |
| Rev. Per Digital Sub. | $ 24.58 | 25.45 | 27.66 |
| High-Speed Data | 1Q05 | 4Q05 | 1Q06 |
| HSD-ready homes | 10,944,700 | 11,260,300 | 11,338,200 |
| HSD customers | 1,978,400 | 2,196,400 | 2,322,400 |
| Quarterly net sub adds | 94,000 | 76,400 | 126,000 |
| Penetration of homes reached | 18% | 20% | 20% |
| Rev. Per HSD Sub./Mo. | $ 37.11 | $ 36.60 | $ 37.33 |
| Telephony | 1Q05 | 4Q05 | 1Q06 |
| Telephony homes passed | 850,000 | 2,918,000 | 3,911,600 |
| Telephony customers | 55,300 | 121,500 | 191,100 |
| Quarterly net sub adds | 9,900 | 31,600 | 69,600 |
| Penetration of telephony HP | 6.5% | 4.2% | 4.9% |
| Pro Forma tel. rev./tel. sub. | $ 41.34 | $ 39.57 | $ 43.00 |
| Bundled Customers | 1Q05 | 4Q05 | 1Q06 |
| Total Bundled Customers | 1,743,800 | 1,944,800 | 2,050,200 |
Cynthia Brumfield at 10:22 AM|Comments(0)
Blogs We Read
