Charter Posts $358 Million Loss

Tag: Bundle Cable

Charter Communications Inc. reported a narrower first-quarter loss, as the cable-TV provider benefited from a 13% increase in average revenue per user and a boost in subscribers.

The St. Louis company, which is controlled by Microsoft Corp. co-founder Paul Allen, posted a net loss of $358 million, or 97 cents a share, compared with a year-earlier loss of $381 million, or $1.04 a share.

Revenue rose 9.8% to $1.56 billion.

Revenue for the video unit rose 2.4%, while the number of digital-video customers climbed 6.3% from a year earlier to 3.02 million. Video-subscriber growth for the quarter and revenue gains per video subscriber both hit levels last seen in 2003. The high-speed Internet segment saw broad-based gains, while phone revenue and subscribers nearly doubled from a year earlier.

"Our continued strong performance into 2008 reflects our focus and execution as we pursue the right strategies for Charter, including driving bundled penetration and targeting our operating and capital investments toward the projects with the highest expected returns," said Chief Executive Neil Smit said.

The debt-laden cable provider in March raised $1 billion from the junk-bond market. The same day, the company disclosed Mr. Allen had received informal inquiries about potential investments or transactions involving the company. Mr. Allen said last year he would consider a shake-up at Charter -- anything from privatization to recapitalization or restructuring to "mergers or reorganization or sales of material assets."

Charter warned in March it could be forced to seek bankruptcy protection if it failed to raise additional funds to finance its cash needs by 2010. At March 31, the company had $20.6 billion in long-term debt and $467 million of cash on hand.

While the rest of the cable industry spent heavily in the 1990s in order to offer the "triple play" bundle of TV, Internet and phone service, Charter fell behind its peers because of its heavy debt load and liquidity issues. The company was also sidetracked by an accounting debacle that led to the resignation of several senior management members.