What does Charter Communications (CHTR) Q1 earnings hold for us?
Charter Communications CHTR is expected to release its first quarter 2022 results on April 29.
Zacks’ consensus estimate for Q1 2022 revenue is pegged at $13.21 billion, indicating a 5.49% increase over the figure reported for the prior year quarter.
The earnings consensus mark was down 0.5% at $6.52 over the past 30 days, suggesting growth of 58.64% from the figure reported in the year-ago quarter.
Charter’s earnings have topped Zacks’ consensus estimate in three of the past four quarters and missed the same in one. CHTR has a four-quarter earnings surprise of 12.04%, on average.
Let’s see how things pan out for the upcoming announcement.
Factors to Consider
Charter’s revenue in the quarter ahead is expected to have benefited from an increase in internet subscribers, fueled by work from home and home learning trends and an increase in media consumption.
Charter’s Spectrum News recorded strong viewership in January 2022, with an average linear audience increase of 7% and reaching more than 2.9 million daily household viewers across all digital and linear platforms in January, the highest number cross-platform households reached by Spectrum News since February 2021. In January, the Spectrum News app surpassed 1.8 million total downloads since its launch in July 2020.
Charter’s Spectrum News cemented its place as the most watched news network by Spectrum customers in March. The network averaged more than 2.6 million daily viewer households on its linear and digital platforms across its local news footprint in 12 states.
Strong consumer media consumption, which has made Spectrum News the most-watched channel for three consecutive months, is expected to have continued in the quarter ahead.
Charter Communications, Inc. Awards and EPS Surprise
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The Zacks consensus estimate for home internet revenue is pegged at $5.49 billion, indicating growth of 7.9% over the figure reported in the prior year quarter. The consensus mark for home internet subscribers is pegged at 28.35 million, suggesting 3.6% year-over-year subscriber growth.
As of December 31, 2021, Charter had 32.1 million total customer relationships, with 939,000 net new customer relationships added over the last 12 months.
The company had 28 million residential Internet customers, up 4.1% year-over-year, in the fourth quarter of 2021. Internet revenue increased 11.6% year-over-year for to reach $5.42 billion, thanks to the growth in the number of Internet customers, the increase in promotional rates and the reduction of discounts on bundles. and a higher pooled income allowance. The trend is expected to have continued in the quarter ahead.
The expansion of Charter Communication’s mobile subscriber base is also a key enabler. The first-quarter mobile revenue consensus mark is pegged at $664 million, indicating a 34.9% increase over the year-ago quarter figure.
Zacks’ consensus estimate for home video revenue is pegged at $4.36 billion, indicating growth of 0.4% over the figure reported in the prior year quarter.
However, Charter has suffered due to video subscriber attrition resulting from the cord cut and fierce competition from Netflix, Disney+ and Amazon Prime Video.
Small and medium-sized businesses have been hardest hit by the pandemic. Charter’s substantial exposure (around 2 million customers) to this cohort is expected to have hampered the company’s advertising revenue growth in the quarter ahead.
Zacks’ consensus estimate for ad sales is pegged at $373 million, calling for an 8.4% increase from the figure reported in the year-ago quarter.
Main highlights of the first quarter
In late March, Charter Communications announced the launch of Spectrum Internet 100. The company will offer Internet 100 in nearly all of its 41-state service area.
On March 3, Charter’s Spectrum announced the release of an eight-episode Spectrum Originals drama series, Panhandle.
Located in the panhandle of Florida, The sony The SONY Pictures Television Studios-produced series will have a nine-month exclusive on Spectrum (free, ad-free), then have an exclusive free ad-supported window on Roku‘s ROKU The Roku Channel as a Roku original.
The move will help Sony expand its relationship with Charter’s Spectrum through the former’s new collective collaboration with Roku, further boosting the series’ viewership.
In February, Spectrum in agreement with NBCUniversal, a Comcast The CMCSA affiliate announced a cross-platform content offering for NBCUniversal’s coverage of the XXIV Olympic Winter Games from Beijing, China, February 3-20, 2022.
Under the agreement, Spectrum subscribers will have access to Comcast-owned NBCUniversal’s record-breaking 2,800+ hours of Olympic programming, including coverage of all on-demand competition sessions.
Charter currently has a Zacks rank #3 (Hold).
CHTR is down 20.8% over the past year compared to the 12.1% drop in the Zacks Cable TV industry and the 20.8% drop in the Consumer Discretionary sector .
You can see the full list of Zacks #1 Rank stocks here.
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