The company plans to eliminate $2 billion in annualized operating costs over the next 18 months by restructuring marketing and sales for its core internet division. This overhaul operates independently from the projected $1 billion in synergies tied to its recent $34.5 billion Cox Communications buyout. Management is pivoting toward mobile offerings after shedding 233,000 internet and 77,000 video customers in the third quarter alone. Financial pressure remains acute, with quarterly revenue missing consensus and shares dropping more than 3 percent following the report.
Key points
The planned cost reductions are distinct from the $1 billion in projected synergies from…: The planned cost reductions are distinct from the $1 billion in projected synergies from the $34.5 billion Cox acquisition.
Charter is restructuring marketing to emphasize mobile and video products in response to…: Charter is restructuring marketing to emphasize mobile and video products in response to intensifying broadband and streaming competition.
Heavy leverage continues to present headwinds, with total outstanding debt reaching $108.…: Heavy leverage continues to present headwinds, with total outstanding debt reaching $108.6 billion against just $573 million in cash.
Sources checked by our analysis pipeline: 1
Nov 6 : Charter Communications said on Friday it would cut $2 billion in annualized operating costs over the next 18 months as part of an overhaul of its operating model aimed at reviving growth in a competitive cable and broadband market.
Shares of the company fell more than 3 per cent in morning trading. They have fallen 39.7 per cent so far this year through Thursday's close.
Charter said it would revamp how it markets and sells its core internet service and lean more on its mobile and video products to add customers and improve retention.
Charter has "not generated the customer growth and performance we expect," CEO Chris Winfrey said on a post-earnings call.
The cost cuts are separate from more than $1 billion in anticipated synergies from Charter's acquisition of Cox Communications, which closed on August 19.
The $34.5 billion deal, including debt, combined two of the largest US cable and broadband operators as Netflix, Disney+, Verizon and T-Mobile intensify competition for customers.
Charter lost 233,000 internet customers in the third quarter on a pro forma basis,…
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