Charter posts fourth-quarter loss

ST. LOUIS -- Charter Communications Inc., the nation's third-largest cable TV systems operator, said Thursday its loss narrowed in the fourth quarter versus a year ago as it pressed its bid to restructure and cut debt. Its shares still slid more than 9 percent, with one analyst calling Charter's unit growth "disappointing."

The St. Louis-based company, controlled by Microsoft Corp. co-founder Paul Allen and serving about 6.6 million customers in 40 states, said Thursday it lost $58 million, or 20 cents per share, during the three months ended Dec. 31.

That compared with a loss of $1.87 billion, or $6.36 a share, a year ago. Both earnings figures were after payments of $1 million in preferred stock dividends.

Analysts surveyed by Thomson First Call were expecting a loss of 42 cents a share.

Charter's shares fell 44 cents, or 9.7 percent, to close at $4.40 Thursday on the Nasdaq Stock Market, with cable industry analyst Ted Henderson attributing the selloff to the company's "disappointing" unit growth.

"I think what we saw hopefully was the end of their transition year," said Henderson, a Denver-analyst with Stifel, Nicolaus & Co. Before Thursday, "the stock had traded up on expectations that fourth-quarter results might have been stronger."

Fourth-quarter revenues rose 2 percent to $1.22 billion from $1.19 billion, growth the company largely pinned on a 47 percent rise in high-speed data revenues.

Operating costs and expenses were flat in the latest period at $733 million, reflecting higher programming costs partly offset by reduced marketing and other expenses.

Charter, with about $18.6 billion in debt, launched a restructuring effort in 2002 and pressed it throughout last year. As part of that, Charter posted a $35 million special charge in the fourth quarter of 2002, mostly tied to its work force cutbacks and winnowing operations from three divisions and 10 regions into five operating divisions, eliminating redundancies and streamlining its management.

Vogel on Thursday again called 2003 Charter's "year of transition" as the company reorganized, "made significant changes in our management team," and ratcheted up its marketing and promotional efforts over the last half of 2003 to slow the loss of analog video customers.

While seeing dropoffs in video sales and advertising, Charter added 88,100 high-speed data customers in the fourth quarter, bringing to 477,400 the number of such customers the company has signed on since December 2002. Those numbers exclude the impact of Charter's selling its cable system in Port Orchard, Wash., to WaveDivision Holdings LLC for $91 million.

"Even in this transition year, we accomplished much, which we believe positions the company to improve sales, customer satisfaction and operating performance in 2004," he said.

Charter said it "is focused on driving revenue growth in 2004 by defending its existing customer base, and delivering advanced services that will enhance the digital video product, reduce churn and continue to drive high-speed data growth."

Intent on divesting itself of assets it deems not geographically strategic, Charter said it sold the Port Orchard cable system and by April expects to close its sale of various East Coast cable television systems, serving about 235,000 customers, to Atlantic Broadband LLC for at least $740 million in cash. Proceeds from both deals were to be used to repay bank debt.

Vogel said Charter would "continue to evaluate opportunites to reduce intermediate term debt maturities and leverage."

"We will not lose sight of our goal to further improve our balance sheet," Vogel told analysts in a conference call.

For all of 2003, Charter lost $242 million, or 82 cents a share, compared with a loss of $2.52 billion, or $8.55 a share, during 2002. Revenue rose 6 percent to $4.82 billion, up from $4.57 billion in 2002.

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