Charter Communications 3Q loss narrows

Charter Communications, one of the nation's biggest cable television system operators, on Thursday reported a narrower third-quarter loss compared with a year earlier, helped by gains in phone and high-speed Internet revenue as well as cable TV price increases.

But the St. Louis-based company, which is controlled by Microsoft Corp. co-founder Paul Allen, continues to struggle with its debt burden. It reported interest expenses of $478 million in the quarter, which wiped out its $208 million operating income.

Charter reported a loss of $322 million, or 86 cents per share, in the three months ended Sept. 30 compared with a loss of $407 million, or $1.10 per share, a year earlier. Prior-year results included a $56 million write-down on the value of its assets.

Analysts surveyed by Thomson Reuters predicted a loss of 67 cents per share for the latest quarter. Analysts' estimates typically exclude one-time items.

Revenue rose 7 percent to $1.64 billion from $1.53 billion.

Charter said it has introduced cheaper bundles of services for cost-conscious customers.

"The value message plays well in this economy," said Neil Smit, president and chief executive, in a conference call with analysts.

Thus far, the economy has had a "slight impact" on operations, he said.

In the quarter, customers signed up for 205,400 new lines of service, up 50 percent from a year ago. Sign-ups include existing customers who buy more services.

Charter is the nation's fourth largest cable TV operator with 5.5 million subscribers as of Sept. 30. It trails Comcast Corp., Time Warner Cable Inc. and Cox Communications.

Subscribers on average paid $106.07 per month, up 11 percent from last year, as they signed up for advanced services, upgraded to more expensive tiers and bought bundles of video, Internet and phone services.

Video revenue rose 2.6 percent to $867 million, buoyed by 61,600 new digital cable customers as the number of basic cable customers fell by nearly 26,000. Video prices rose 6.6 percent to $58.87 a month on average, which includes pay-per-view purchases.

High-speed Internet revenue was up 7.5 percent to $342 million, and phone revenue rose 53 percent to $144 million. Charter added 70,900 new Internet customers in the quarter, 32 percent more than it added a year earlier, and 98,000 new phone customers, up 60 percent.

Standard & Poor's analyst Tuna Amobi kept his "buy" rating on the stock and raised the target price by 50 cents to $1.

"The highly leveraged cable operator seems to be holding up relatively well in a difficult economy," he said in a research note.

But with major asset sales unlikely in the near term, the analyst said Charter's ability to handle liquidity issues is "highly critical."

Shares of Charter rose a penny to 44 cents in midday trading Thursday.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.