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Charter's Loss Widens in Quarter

The company's cable TV subscriber count drops. It also is spending more on programming, ads and system upgrades.

August 10, 2004|From Bloomberg News

Charter Communications Inc. said Monday that its second-quarter loss widened as the company lost cable TV customers and marketing and programming costs rose.

The net loss expanded to $415 million, or $1.39 a share, from a loss of $37 million, or 13 cents, a year earlier. Sales rose 1.8% to $1.24 billion, the St. Louis-based company said.

Charter lost 58,800 cable subscribers in the quarter to satellite TV operators such as DirecTV Group Inc., which are joining with phone carriers to sell services. Charter, which serves about 500,000 customers in the Los Angeles area, slipped to fourth largest among U.S. cable TV operators this year.

Shares of Charter fell 1 cent to $3.07 on Nasdaq. They have declined 20% in the last year.

Chief Executive Carl Vogel, who reduced debt last year to $18.6 billion, is spending more on upgrading cable systems to offer new services such as high-definition television.

Charter ended the quarter with 6.13 million cable subscribers. Of those cable customers, 2.65 million also subscribed to the company's digital TV service.

The company said it had added 58,400 customers for its high-speed Internet service, bringing the total to 1.71 million users.

Charter competes for Web-access users with phone carriers such as SBC Communications Inc. and Time Warner Inc.'s America Online service.

The fees Charter pays to media companies to carry cable TV networks including CNN and ESPN increased 10% during the quarter, Charter said.

Vogel also boosted spending on advertising the company's services by 29%. Spending on upgrading cable systems increased 25% to $200 million.

Comcast Corp., Time Warner Cable and Cox Communications Inc., the three biggest U.S. cable TV operators, also said they had lost cable TV subscribers during the second quarter.

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