Why Charter Communications' Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Charter Communications (NASDAQ: CHTR  ) gained more than 10% today, after reporting earnings, despite the fact that they weren't particularly good earnings.

So what: Charter's fourth quarter revenue of $1.91 billion was a 4% increase year over year, and right in line with Wall Street's consensus. Its bottom-line result, a loss of $0.41 per share, was significantly worse than the $0.18 loss per share that analysts had modeled. Higher revenue from TV service sales -- which came in at $92 million -- were apparently a bright spot in this otherwise weak report. Analysts were expecting $894 million in revenue for the segment. A higher-than-expected rate of customer upgrades, and narrower customer losses than seen in 2011, also offered reasons for optimism.

Now what: Charter agreed to purchase Cablevision's (NYSE: CVC  ) Optimum West unit just this past month, which should help it grow at a faster rate. The $0.41 loss per share is a relatively narrow $40 million net loss, and is an improvement over last year's $0.63 loss per share in the fourth quarter. However, with no profitability on the horizon, and a larger debt load than its total market cap, it's worth pondering whether this stock is still worth holding onto.

Want more news and updates? Add Charter Communications to your Watchlist now.

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