Second-quarter cord-cutting pain continued, as Charter Communications said total consumer TV subscribers fell 90,000 in the period.
Charter — now the second-biggest U.S. cable operator after Comcast — had 16.6 million residential video customers as of June 30. The company said it dropped 90,000 TV subs in the period, versus 152,000 in the year-earlier period including Time Warner Cable and Bright House Networks on a pro-forma basis. Charter closed the acquisition of TWC and Bright House in May 2016.
Of the operators that have reported so far, AT&T had the worst results on video — dropping a whopping 351,000 traditional satellite and fiber TV subscribers in Q2, which is seasonally weak for the pay-TV sector. Comcast reported a net loss of 45,000 residential TV customers during the period, versus a loss of 21,000 in the year-earlier period, while Verizon shed just 15,000 Fios Video subs.
Charter reported Q2 sales of $10.4 billion, up 3.9% on a pro forma basis. It posted net income of 53 cents per share — missing Wall Street estimates of 81 cents per share -- which Charter said was primarily driven by a "pension curtailment gain" related to Charter's announcement to freeze TWC's legacy defined benefit plans in the second quarter of 2016 as well as higher depreciation and amortization in the most recent quarter.
In June, Charter noted that it completed the rollout of its Spectrum brand and residential pricing and packaging in the legacy TWC and Bright House areas. Earlier this month, the operator finished the switch to Spectrum pricing and packaging for small and medium businesses in TWC and Bright House markets.
"We are now offering a simple, high-value product across our 50 million passings, under one brand, Spectrum," Tom Rutledge, Charter's chairman and CEO, said in announcing the results. He added, "That product is working in the marketplace, and we continue to see higher year-over-year customer connect volumes across our new footprint."
Charter added 231,000 residential Internet customers in the second quarter of 2017, while pro forma second quarter 2016 Internet customers grew by 236,000, or 308,000 when adjusted for seasonal program changes at Legacy Bright House. Charter now offers minimum Internet speeds of at least 100 Mbps to over 50% of its total footprint, with nearly all of Charter's remaining footprint offering minimum Internet speeds of at least 60 Mbps. As of June 30, 2017, 93% of Legacy Charter's residential Internet customers subscribed to tiers that provided speeds of 60 Mbps or more compared to 52% at Legacy TWC and 78% at Legacy Bright House. The Company continues to see strong demand for its Internet service as consumers value the speed and reliability of Charter's Internet offering. As of June 30, 2017, Charter had 22.0 million residential Internet customers.
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