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Financial

Charter Can't Get No Respect

Pity poor Charter Communications Inc. . Like the late, great comedian Rodney Dangerfield, it just can't get no respect no matter what it does.

Take the company's third-quarter earnings report yesterday. Charter, the nation's fourth largest cable operator, posted strong year-over-year revenue and cashflow growth in the summer quarter. The MSO also reported very healthy growth in the number of new revenue generating units (RGUs) and bundled customers as it signed up 88,000 broadband, 82,000 VOIP, and 49,000 digital cable subscribers.

Yet, as usual, these genuinely positive developments on the operations side took a backseat to Charter's continuing financial woes. Despite its 10.9 percent increase in quarterly revenues to $1.39 billion on a pro forma basis, the company chalked up a net loss of $133 million because of higher debt and income tax payments, reversing a nominal $76 million gain in the year-ago period.

As a result, Charter's stock price, which had been slowly but steadily climbing over the last year from a low of 88 cents per share last fall to a high of $2.32 last week, fell back in early trading Tuesday. It didn't begin to recover and climb again until this morning, when Citigroup lifted its rating of the stock from Hold to Buy.

By raising its rating of the MSO's stock, Citigroup joins a very select group of Charter boosters on Wall Street. Up until now, only UBS Securities has had a Buy rating on the company's laggard stock.

In his latest research note on Paul Allen's cable giant, Aryeh Bourkoff, an analyst with UBS Securities, proclaimed that the MSO's revenue and cashflow growth are "a clear sign of recovery as the early stages of the VOIP rollout progress." He predicted that the company's stock could rise to as high as $10 a share if the company maintains its momentum.

So, at a time when the St. Louis Cardinals won their first World Series in 24 years, could things be finally looking up for the St. Louis-based Charter as well? Maybe so. But don't forget that this is Charter we're talking about. And, like Rodney, this company just can't get no respect.

— Alan Breznick, Site Editor, Cable Digital News

stonelion 12/5/2012 | 3:35:08 AM
re: Charter Can't Get No Respect "Financial" aspects aside Charter's lousy customer service should spell their doom anyway. But, of course, this is cable .. a virtual monopoly which leaves "customers" with no alternative choice. Personally, I'm moving. Yep .. packing up my entire household and moving .. to a place where Charter is NOT the cable provider. What a shame it is that this is the only avenue to customers of derilict cable providers. I work from home and cannot make a living without cable internet access. Yet, my cable connection fails all too frequently, sometimes it's out for days, and yet not once has Charter explained the outage to my satisfaction. One time it was disconnected at the juntion box by mistake when a technician was attempting to disconnect another customer's service. This was because Charter had mislabeled the cables in the first place. But getting that problem corrected took almost three weeks, requiring three separate service calls, NONE of which occurred during the four-hour period in which they promised to show up. Not once .. in four hours! First they thought it was my TV. Then they were sure it was rats in the walls that had eaten the cable. In the end it was manually disconnected by their own service tech. Three weeks without service! And do you think they credited my account for that month? NO. Do you think they at least apologized? NO. Do you think they even acknowledged the complaint letter I wrote them? NO. As a customer for over 10 years, I can tell you one thing: Charter never ceases to underachieve the extremely low service expectations that I have for them.

And you think they're "not respected" because they managed to increase earnings? What a joke. If cable service was truly a "free market" industry, I predict Charter would be gone in a year.
alchemy 12/5/2012 | 3:35:04 AM
re: Charter Can't Get No Respect stonelion writes:
"Financial" aspects aside Charter's lousy customer service should spell their doom anyway.

You can say that about any MSO. And any ILEC. And any ISP. And any satellite company. And any cellular provider. And Vonage.

Every service provider is going to completely piss off a faction of their customers no matter what they do. The reality is that most people get pretty good service. If you happen to be among the unlucky, huge service providers aren't structured to appease irate customers. At least you aren't being handled by a call center in Bangalore yet.
Michael Harris 12/5/2012 | 3:35:00 AM
re: Charter Can't Get No Respect Every service provider is going to completely piss off a faction of their customers no matter what they do. The reality is that most people get pretty good service.

Perhaps this is a governing principle in the universe. Maybe it could be called: Alchemy's First Law of Broadband Service Experience Entropy. ;)

Michael
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