Charter Communications, the home cable, internet and phone services company that in May completed its purchase of Time Warner Cable and Bright House Networks, saw its net revenue climb 7.4% in Q3, from $9.3 billion to $10 billion.
Adjusted EBITDA grew from $3.2 billion to $3.6 billion as net income soared from $2 million (1 cent per diluted share) to $189 million (69 cents per diluted share).
Charter says the revenue gains are driven by the acquisition of TWC and Bright House.
Yet, the gains — which met Wall Street consensus estimates — failed to win over investors on Thursday. Charter stock finished the day down .
Why?
One possible reason is how revenue growth is being achieved.
Internet revenue increased 12.7%, to $3.21 billion.
But video revenue grew by just 3%, to $4.1 billion.
With “cord-cutting” a growing concern at MSOs, the slower growth at the biggest revenue driver could be scaring off shareholders. At the closing bell, CHTR dipped $5.57, to $247.34 — a 2.2% decline.
For Zacks, Charter had a strong Q3, with its quarterly earnings per share of 69 cents well above the Zacks Consensus Estimate of 62 cents per share.
Third-quarter 2016 total revenue of $10.04 billion increased 7.4% year over year, beating the Zacks Consensus Estimate of $10.02 billion.
After peaking Sept. 7 at $277.56, Charter shares have seen some giveback after a highly successful year-long climb from $177.53 per share.
