Charter Communications, the nation’s No. 4 cable systems operator, posted pro forma second-quarter financial results Wednesday showing a relatively upbeat 16% boost in operating cash flow and a 10% climb in revenue.
Charter, which is controlled by billionaire Paul Allen, went public in November 1999 and thus didn’t disclose a bottom-line figure for the 1999 second quarter. But its loss in the latest quarter totaled $196.8 million.
Cash flow rose to $373.2 million and revenue hit $794.8 million. The St. Louis-based company’s pro forma results represented year-ago comparisons for cash flow and revenue as if more recently acquired operations were in the Charter fold prior to the ’99 second quarter.
Broadband competition from telephone companies has hampered revenue growth at cable companies. The trend seems to have hit rival Cox Communications, which reported its second-quarter results earlier in the week, harder than Charter, observers said.
“Cable stocks are in a transition period, coming off a major uptick following the relaxing of regulation and the excitement over the potential penetration of new services,” analyst Fred Moran of Jefferies & Co. said in a research note posted on Bloomberg News. “It will be difficult for stocks to recapture former highs this year, simply because they got to overextended valuations last year following a major industry consolidation push that drove up transaction prices, led by AT&T and Charter.
“Probably these stocks are near or at the bottom of what is an appropriate trading range, given their outlook,” Moran said. “They may mark time at this level for a while.”
Charter reported its results after the close of market trading. Its shares closed unchanged Wednesday at $13.94.