Charter Communications Inc. (CHTR Quick QuoteCHTR - Free Report) reported disappointing financial results in first-quarter 2017, wherein both the top and the bottom line lagged the Zacks Consensus Estimate.

GAAP net income in the reported quarter was $155 million compared with net income of $179 million in the year-ago quarter (calculated on a pro forma basis). Quarterly earnings per share of 57 cents per share were below the Zacks Consensus Estimate of 99 cents.

First-quarter 2017 total revenue of $10,164 million increased 4.3% year over year but missed the Zacks Consensus Estimate of $10,253.4 million.

Residential segment revenues came in at $8,171 million compared with $7,839 million in the year-ago quarter. Within the Residential segment, Video revenues totaled $4,079 million, up 0.1% year over year. Internet revenues came in at $3,398 million, up 11.9% from the prior-year quarter while Voice revenues were $694 million, down 4.8% year over year.

Commercial revenues totaled $1,439 million, up 10.8% year over year. Within the Commercial segment, small and medium business revenues were $900 million, up 11.3% year over year. Enterprise revenues came in at $539 million, up 10.1% on a year-over-year basis.

Advertising revenues were $337 million, down 7.7% year over year. Other revenues came in at $217 million, down 9.7%.

Quarterly operating costs and expenses were $6,510 million compared with $6,309 million in the year-ago quarter. First-quarter adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $3,654 million compared with $3,433 million in the year-ago quarter. EBITDA margin came in at 35.9% compared with 35.2% in first-quarter 2016.

In the first quarter of 2017, Charter Communications generated $2,843 million of cash from operations compared with $424 million a year ago. Free cash flow in the reported quarter was $1,138 million.

At the end of Mar 2017, Charter Communications had $2,920 million of cash and cash equivalents and $63,444 million of outstanding debt compared with $1,535 million and $62,464 million, respectively, at the end of Dec 2016.

Charter Communications currently carries a Zacks Rank #5 (Strong Sell). The company competes with AT&T Inc. (T Quick QuoteT - Free Report) , Verizon Communications Inc. (VZ Quick QuoteVZ - Free Report) and Comcast Corp. (CMCSA Quick QuoteCMCSA - Free Report) in the intensely competitive triple-play cable MSO (multi service operator) industry. All the three above-mentioned stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Subscriber Statistics

Residential Segment: As of Mar 31, 2017, Charter Communications’ residential high-speed Internet subscribers rose by 428,000 to 21.802 million. Voice subscribers grew 37,000 to 10.364 million. However, video subscribers decreased by 100,000 to 16.736 million.

Pro Forma Monthly Residential Revenue per Residential Customer was $109.11 compared with $109 in the prior-year quarter. Single Play penetration was 39.7%, Double Play penetration was 26.0% and Triple Play penetration was 34.3%.

Commercial Segment: As of Mar 31, 2017, Charter Communications had 411,000 video, 1,249,000 high-speed Internet and 809,000 voice subscribers. During the reported quarter, the company added 11,000 video customers, 30,000 high-speed Internet and 31,000 voice customers.

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