S&P lowers its rating on debt-laden cabler
NEW YORK — Paul Allen’s Charter Communications can only hope for a better 2003. As this year winds to a close, Standard & Poor’s lowered its rating on the debt-laden cable company, citing a glum fourth-quarter outlook and an ongoing federal investigation into Charter’s accounting practices.S&P has put the nation’s third-largest cabler on so-called credit watch with negative implications — meaning its corporate bonds could be downgraded again. That’s news that spooks investors, who have been dumping Charter shares for months. The agency also said Charter’s firing of two top execs, disclosed Monday, could be disruptive in the near term. Charter fired chief financial officer Kent Kalkwarf and chief operating officer David Barford, both of whom had been on leave since late October, in light of grand jury investigations into Charter’s accounting. Probe is focused on how the company counts its subscribers and whether it inflated those figures. Charter also said it would miss its fourth quarter cash flow targets and that revenue would be on the low end of expectations. Satellite hit Company carries $18.5 billion in debt on its balance sheet and has been harder hit than many of its peers by competition from satellite. The cabler, which has a total of 6.7 million subs, lost about 86,000 basic subscribers in the third quarter. Charter’s shares have descended from a high of more than $17 to a low of 76¢ in the past year. They rose 5.41% Thursday to close at $1.17 — possibly after an investor told Business Week he thinks the company’s stock has been battered enough and that its strong backing — Allen and Microsoft — mean it’s unlikely to go under.