Charter Communications lost 36,000 residential video customers during the fourth quarter but still managed to increase video revenues.
Charter swung to a loss year over year after adding 2,000 video subscribers in the fourth quarter of 2017. But the loss was an improvement over the 66,000 video subscribers lost in the third quarter. The company ended 2018 with 16.1 million residential video subscribers.
Video revenues totaling $4.4 billion in the fourth quarter represented an increase of 3.4% compared to one year ago. The company attributed the modest growth to annual rate adjustments, promotional roll-off and higher bundled revenue allocation relating to the launch of Spectrum pricing and packaging in Legacy TWC and Legacy Bright House.
In all, Charter lost approximately 300,000 video primary service units in 2018 but added more than 1 million broadband PSUs.
"We performed well in 2018, growing our Internet customer base by 1.3 million, cable revenue by 4.7%, and cable Adjusted EBITDA by 6.5%—very strong operating and financial performance, particularly in the midst of what we believe is the largest cable integration ever," said Tom Rutledge, chairman and CEO of Charter, in a statement. "In 2019, we expect the operating and cash flow performance of our cable business will further demonstrate the superiority of our network, the returns of our recent investments, and the longterm value creation driven by our consumer-focused operating strategy."
Charter’s consolidated fourth-quarter revenues grew 5.9% to $11.2 billion thanks to residential revenue growth of 3.9%, commercial revenue growth of 4.5% and advertising revenue growth of 34.1%. The big spike in ad revenue (which still only totaled $562 million during the quarter) was largely attributed to political spending. Fourth-quarter adjusted EBITDA of $4.2 billion grew 4.6% year over year.
Charter’s operating expenses during the quarter rose 6.7% year over year due in part to increased programming expenses, up 5.5% (or $147 million).