Charter Shares Dip on Higher Q3 Capex

Basic subscriber losses rise to 73,000 in period

An unexpected rise in capital expenditures in the third
quarter helped drive Charter Communications stock down about 2% Tuesday, but
analysts seemed optimistic that the St. Louis-based MSO was moving forward
according to plan.

Charter reported somewhat sluggish 4% revenue growth to $1.9
billion and cash flow declined 0.5% to $651million, missing analysts' consensus
estimates of 4.2% revenue 2.8% cash flow growth, respectively. Basic-video
losses of 73,000 in the period were above aggressive consensus of a loss of
45,000 video customers, while the company beat estimates by 10,000 subscribers
on the high-speed data front, adding 78,000 commercial and residential
customers.

But the real concern it appeared from investors was a 60%
rise in capital expenditures to $488 million in the period, from $304 million
in the prior year and well above consensus estimates of $412 million. While
Charter said the spike was due to an increase in spending on customer premises
equipment, it appeared to spook investors at least for a little while on
Tuesday.

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