(Reuters) – Charter Communications beat Wall Street estimates for quarterly profit and reported fewer-than-expected broadband subscriber losses on Friday, sending its shares up 7% in premarket trading.
With a highly competitive broadband market providing little opportunity for subscriber additions in major markets, Charter’s bet on rural expansion is boosting its business.
The company’s offerings such as Spectrum Internet, which provides lower cost data plans combined with high-speed internet, is well received by customers.
The broadband and cable TV provider’s internet customers decreased by 149,000 in the second quarter, compared with Visible Alpha estimates of a loss of 264,520 users.
The losses were higher sequentially, which the company attributed to the end of a federal internet subsidy.
Charter has been a particularly big beneficiary of the Affordable Connectivity Program (ACP), a government broadband support program that offered connectivity to 23 million households in the United States.
It posted profit of $8.49 per share, well above analysts’ average estimate of $7.98, according to LSEG data.
Charter now expects its full-year 2024 capital expenditure to total about $12 billion, a decrease from its previously expected range of between $12.2 billion and $12.4 billion.
This change reflects lower internet and video customer net additions, including the impact from the end of ACP, which drives lower spending and capitalized installation costs, it said.
Charter’s free cash flow rose 94% in the second quarter to $1.30 billion, significantly higher than the Visible Alpha estimates of $414.4 million.
Revenue for the second quarter came in at $13.69 billion, above LSEG estimates of $13.59 billion.
(Reporting by Harshita Mary Varghese; Editing by Shilpi Majumdar)
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