The third quarter is usually a big quarter for cable companies as college students leave home and establish new internet connections at school. But Charter Communications Inc. said it is still seeing lower than usual transaction activity due to the COVID-19 pandemic.
"Residential customer activity, particularly churn, has taken longer than we expected to return to normal levels. The overall lower level of market churn has reduced sales opportunities available to us," Charter CFO Christopher Winfrey said during Charter's Oct. 29 earnings conference call. "But interestingly, the value of net additions is even higher in this environment."
Charter added 243,000 residential internet customers during the third quarter, compared to 494,000 during the third quarter of 2020 and 351,000 during the third quarter of 2019.
Winfrey said the company remains "very underpenetrated" and hopes the recently announced pricing structure for its unlimited mobile offerings will attract new and existing customers. Starting in October, customers with at least two mobile lines could get unlimited service starting at $29.99 per month, per line. Previously, every line of unlimited service costs $45 per month.
Charter added 244,000 Spectrum mobile lines in the third quarter, compared to growth of 363,000 in the same quarter of 2020 and 276,000 in the same quarter of 2019.
"Despite the lower number of selling opportunities from cable sales, we continue to drive mobile growth with our high-quality, attractively priced service rather than using device subsidies," CFO Jessica Fischer said.
Fischer also said the low-churn environment is creating more longer-tenured customers, which is positively impacting average revenue per user.
"The financial results of having those customers in the system for longer really are very good, both on the revenue and the transaction side," Fischer said.
Residential video customers decreased by 133,000 in the third quarter, compared to an increase of 53,000 a year ago and a decrease of 77,000 in the 2019 period.
Charter's overall residential customer relationships grew by 163,000 in the third quarter, compared to growth of 416,000 in the same quarter of 2020 and 282,000 in the same quarter of 2019. As of Sept. 30, 2021, Charter had 29.8 million residential customer relationships, with year-over-year growth of 3.2%.
The company reported total revenue of $13.15 billion, up 9.2% year over year.
Charter's third-quarter net income attributable to shareholders came in at $1.22 billion, or $6.50 per share, compared to $814 million, or $3.90 per share, in the year-ago period.
The S&P Capital IQ consensus EPS estimate for the period was $5.80 on a normalized basis and $5.75 on a GAAP basis.
