It's your basic good news-terrible news situation at Charter Communications (NYSE: CHTR ) . On the bright side, the company's loss was slimmed somewhat in the first quarter of 2008. But in reality, it continues to labor under a load of debt and is beset by a share price that has plummeted by about 75% just since last summer.
On Monday, the company reported a loss of $358 million, or $0.97 a share, versus $381 million, or $1.04 a share, in the same quarter of 2007. At the same time, revenues were up nearly 10% to $1.56 billion in the March 2008 quarter.
From an operating perspective, Charter has followed a lead set by industry kingpin Comcast (Nasdaq: CMCSA ) and second-in-command Time Warner Cable (NYSE: TWC ) , along with Cablevision (NYSE: CVC ) and Mediacom (Nasdaq: MCCC ) , in chalking up respectable subscriber growth. That growth was achieved in all three of Charter's triple-play options: digital video, high-speed data, and telephone. Indeed, the latter came close to doubling its subscriber list from a year ago.
The unanimity of subscriber growth among the cable operators indicates that the doom and gloom sentiments existing until recently about the group's ability to fend off triple-play incursions from the likes of Verizon (NYSE: VZ ) or AT&T (NYSE: T ) were probably overdone. But then, the market has long obsessed over the prospects of cable being done in by the competitor du jour.
In Charter's case however, the company's wobbly capital structure will likely be more significant for its future than are its operating successes. With its long-term debt sitting above $20 billion, controlling shareholder Paul Allen will almost certainly be forced to privatize, restructure, or otherwise materially shore up Charter's cratering balance sheet.
It seems to me, then, that if you have a yen for cable investments, your path is clear: All the players are doing well operationally, but there's a vast difference in their respective financial structures. Beyond that, only Comcast is willing to toss in a reasonable dividend. Enough said.
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