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Charter Shares Dip on Higher Q3 Capex

Basic subscriber losses rise to 73,000 in period 11/06/2012 05:26:26 PM Eastern

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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