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Charter Communications posts wider loss

March 17, 2009|Associated Press

Charter Communications Inc., the nation's fourth-largest cable operator, said Monday that its loss for the fourth quarter widened from a year earlier and one of its subsidiaries would not make a debt interest payment in light of a pending bankruptcy filing.

Charter, which is controlled by Microsoft Corp. co-founder Paul Allen, plans to file a prearranged Chapter 11 bankruptcy by April 1. Charter has been skirting insolvency for years, but this time it faces a combination of tight credit and billions of dollars of debt coming due. The St. Louis company hasn't recorded a profit since it went public in 1999.

For the period ended Dec. 31, Charter said its loss climbed to $1.5 billion, or $3.96 a share, compared with a loss of $468 million, or $1.27, a year earlier.

The company said its most recent results included a $1.52-billion impairment charge.

Revenue grew 6.6% to $1.66 billion, mainly driven by growth in its phone and high-speed Internet services.

Charter could have posted a profit for several quarters if it weren't hampered by high interest payments on its massive debt. In the fourth quarter, it paid $486 million interest.

Adjusted earnings before interest, taxes, depreciation and amortization came to $620 million in the quarter, up 10%. The figure excludes the impairment charge and other one-time items, as well as stock compensation expenses.

Charter's business has improved, especially after the introduction of phone and Internet service, as well as its entry into the small and medium-size business market. Digital TV and the popularity of high-definition programs also helped the business.

"Operationally, the company continues to perform according to expectations," said Moody's Investors Service analyst Russ Solomon. Although it didn't post a robust quarter, Charter continues to show "improving trends that has been noted over the last couple of years."

The number of basic video subscribers fell in the quarter by 75,100, a trend seen by other cable operators, and digital subscriber rolls grew, albeit at a slower pace than in the prior year -- up 22,300 compared with an increase of 59,500.

High-speed Internet sign-ups were up 22,900 compared with 50,500.

Phone service growth was halved to 75,200.

The average monthly revenue received from subscribers rose 10% to $108.27, boosted by subscriptions to advanced services, more expensive tiers and bundled packages of video, Internet and phone service.

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