Summary
Charter Communications, Inc. reported solid revenue growth of 4.9% in 2019, reaching $45.8 billion. This growth was primarily driven by an increase in residential Internet and commercial business customers, alongside price adjustments and the successful launch of their mobile service. While video subscriber numbers saw a decline, the company's focus on bundled services and operational efficiencies, such as insourcing customer care and field operations, continues to support customer relationships and margins. The company also highlighted significant investments in its network infrastructure, including the completion of its all-digital conversion and DOCSIS 3.1 rollout, which are expected to lead to lower capital expenditures in the future. Despite these positive operational trends, Charter carries a substantial debt load of approximately $79 billion. While the company generated strong free cash flow of $4.6 billion in 2019 and has ample liquidity, investors should remain aware of the financial leverage and associated risks, including interest rate sensitivity and debt covenant compliance. The company's strategic expansion into mobile services, while promising for future growth and customer retention, also presented a headwind in 2019, reducing Adjusted EBITDA by $520 million. Management remains optimistic about the long-term prospects, emphasizing customer experience improvements and continued service innovation.
Financial Highlights
50 data points| Revenue | $45.76B |
| Operating Expenses | $39.25B |
| Operating Income | $6.51B |
| Net Income | $1.67B |
| EPS (Basic) | $7.60 |
| EPS (Diluted) | $7.45 |
| Shares Outstanding (Basic) | 219.51M |
| Shares Outstanding (Diluted) | 223.79M |
Key Highlights
- 1Revenue increased by 4.9% to $45.8 billion in 2019, driven by residential Internet and commercial customer growth.
- 2Despite a decline in video subscribers, overall customer relationships grew to 29.2 million.
- 3Launched Spectrum Mobile service in late 2018, which contributed $726 million in revenue in 2019, though it negatively impacted Adjusted EBITDA by $520 million.
- 4Completed all-digital conversion and DOCSIS 3.1 technology rollout, expecting lower capital expenditures going forward.
- 5Maintained a strong free cash flow of $4.6 billion in 2019, an increase from $2.2 billion in 2018.
- 6Total debt remains significant at approximately $79 billion, with a leverage ratio of 4.5 times Adjusted EBITDA as of year-end 2019.
- 7Programming costs continue to rise, representing a significant portion of operating expenses (40% of total operating costs and expenses in 2019), posing a challenge to video product margins.