Cable provider Charter Communications (CHTR) topped analysts’ estimate on both the top and bottom lines in its second-quarter result, that caused a 2.76% rise in the stock price during the pre-market trading. The company reported earnings of $1.15 a share, surpassing Wall Street consensus of $1 a share.
The increase in earnings was primarily driven by lower severance-related and transactions expenses, besides a 11.1% decrease in weighted average common shares.
Revenue rose 4.8% to $10.85 billion, slightly above estimates of $10.83 billion. The revenue growth was mainly driven by growth in internet, video, commercial and advertising revenues.
Charter Communications Q2 2018 Earnings Infographic
“Over the last two years, we have invested significantly to quickly integrate and unify the operating strategies of three large cable operators. While that process is disruptive, it has allowed us to position our residential and commercial businesses for long term growth and success, which is beginning to show in our operating results,” said Tom Rutledge, CEO.
Internet revenue jumped 7.3% to $3.8 billion. Video and Commercial revenues rose mid single digit to $4.4 billion and $1.5 billion respectively. Meanwhile, revenue from Voice services declined 18% to $531 million due to value-based pricing and lower bundled revenue allocation.
Cord cutting, due to video streamings services like Netflix (NFLX), Amazon Prime, and Hulu, continues to have serious implications on cable companies. During the quarter, the Stamford-based company witnessed a huge drop in its residential TV subscribers. Residential video customers decreased by 73,000 in Q2 2018, while Q2 2017 video customers decreased by 91,000. As of June 30, 2018, Charter had 16.2 million residential video customers.
Shares of the company have dropped 14.78% year-to-date. On Monday, the shares surged 2.66% to close at $293.90.