Charter targets 2 billion dollars in annual savings
US cable operator Charter Communications announced an operating overhaul targeting 2 billion dollars in annualised savings over 18 months. The plan comes after its Cox transaction and alongside continued internet customer losses. Third-quarter revenue rose on the actual consolidation basis but declined when Cox was included throughout the comparison periods.
Economics & Markets··Morning
An 18-month operating overhaul
US cable and broadband operator Charter Communications announced a new operating model alongside its third-quarter results. It plans to simplify its organisation, eliminate nonessential activities and improve efficiency through vendor partnerships. Management targets 2 billion dollars in annualised operating expense savings over the next 18 months, in addition to more than 1 billion dollars in anticipated savings from transactions involving fellow US cable operator Cox. Customer acquisition, retention and service delivery are priorities of the overhaul.[1], [2]
Cox changes the revenue comparison
Consolidated quarterly revenue increased 9.1 per cent to 14.9 billion dollars, including Cox only after the August transaction closing. On a pro forma basis, which includes Cox throughout the comparison periods, revenue fell 1.5 per cent to 16.5 billion dollars. The actual net loss was 2.4 billion dollars. That result included a 6.3 billion dollar franchise impairment charge.[1]
Internet customers decline as mobile lines grow
The combined business lost 233,000 internet customers, leaving 34.3 million at quarter end. Mobile lines rose by 508,000 to 13.5 million. Actual operating cash flow fell to 4.0 billion dollars from 4.5 billion dollars a year earlier, while free cash flow declined by 947 million dollars to 674 million dollars. Charter identified cash tax timing, one-time transaction costs and capital expenditure accrual changes among the factors affecting cash flow.[1]
