Charter Posts Adjusted Third-Quarter Profit of $21.70 per Share Despite Accounting Loss
Key Facts
Charter Communications said on November 6 that adjusted profit was $21.70 per share in the third quarter of 2026, topping the average estimate of $9.08 from 4 analysts surveyed by Zacks. The adjusted measure excludes nonrecurring gains and costs, while the company recorded an accounting loss per share under reported earnings. The result presents two contrasting pictures of the company’s performance during the quarter: a beat on an adjusted basis, against an accounting loss and pressure in some operating businesses. The announcement also coincided with a decline in the company’s stock during the November 6 session, after it closed at $125.86 in the previous session.
Actual revenue was $14.9 billion, up 9.1% year over year, with Charter attributing the increase mainly to the Cox transactions. The picture changes on a pro forma basis that includes the effect of the deal: revenue was $16.5 billion, down 1.5% from the year-earlier period, due to lower residential revenue. Pro forma residential revenue was $12.2 billion, down 4.1%, as residential customer numbers fell 2.7% and monthly revenue per customer declined 1.6%. The divergence between actual and pro forma figures reflects the company’s expansion through the deal, alongside weaker revenue in its residential business base.
In internet service, pro forma revenue fell 3.7% to $7.1 billion, which the company said was tied to declines in customer numbers and the mix of prices and packages. At the subscriber level, Spectrum Internet lost 233,000 customers on a pro forma basis during the quarter, including 156,000 at legacy Charter and 77,000 at legacy Cox, bringing internet customers to 34.3 million as of September 30. By contrast, Spectrum Mobile added 508,000 lines on a pro forma basis during the quarter, and lines rose 1.8 million in the twelve months ended in September, to 13.5 million. Pro forma mobile service revenue rose 17.3% to $1.2 billion, driven by line growth and pricing adjustments, while video revenue fell 9.8% to $3.6 billion.
Pressure extended to cash generated by the business; actual free cash flow was $674 million, down $947 million from the year-earlier quarter. Charter said cash flow from operating activities was $4.0 billion, compared with $4.5 billion a year earlier, attributing the decline to the timing of cash tax payments and one-time cash costs related to the Cox transactions. In the same quarter, the company exchanged secured notes with an aggregate principal amount of $5.5 billion for a mix of cash and new notes, including about $4.0 billion in cash, and said the transaction reduced leverage by about $1.5 billion. It also repaid $1.0 billion of legacy Cox notes at maturity.
Charter completed the Cox transactions on August 19, 2026, adding more than 11 million passings and more than 5 million customer relationships. As of September 30, total debt was $108.6 billion, while credit facilities provided additional liquidity of about $2.4 billion on top of a cash balance of $573 million. Under its new operating model, the company is targeting $2 billion in annualized operating expense savings over 18 months, in addition to more than $1 billion in expected synergies from the Cox transactions. It also expects 2026 pro forma capital expenditures of about $13.0 billion, excluding transition capital expenditures. The company was scheduled to hold a webcast on the results on November 6 at 8:30 a.m. Eastern time.