Charter Slides On Earnings (CHTR)

Charter Communications Inc. (NASDAQ: CHTR) managed to post narrower losses for Q1 in 2008.  The highly in debt cable company posted a net loss of $358 million, or -$0.97 EPS.  This compares to last year’s loss of $381 million, or -$1.04 EPS.  Revenues came in up over 10% at $1.564 billion pro forma basis and more than a 9% rise on an actual basis.  First Call had estimates pegged at -$0.75 EPS on $1.55 Billion in revenues.

Revenue gains were attributed mostly to increased telephone and high-speed internet revenues.  Here were some of the other internal metrics:

• Revenue generating units rose 7% from Q1 2007 with some 302,000 net adds.
• Video revenue generating units increased 90,900 and video average revenue per user rose over  6%.
• Digital video customers rose 102,800, while basic video customers fell by 11,900.
• Internet customers rose by 85,700.
• The decrease in the company’s loss was attributed to 10.5% higher adjusted pro forma EBITDA of $545 million.
• Net cash flow from operations was $204 million, down from a pro forma number of $263 million in Q1 2007.

Interestingly enough, the net interest expense came in at $465 million for the quarter, and it had a derivative value change that grew to an expense of $37 million (from $1 million in Q1-2007).  If you deducted that derivative expense you could derive an implied raw pro forma earnings per share number of -$0.87 EPS.  As we just noted this weekend in our "10 Stocks Under $10" newsletter, Charter Communications’ last seen short interest was more than 81.88 million shares (about 24 days of volume).

Right after the open, shares were up more than 1% at $1.205; after about 12 minutes of being open, Charter shares were down 5% at $1.14.

Jon Ogg
May 12, 2008