Charter Communications to Post Q1 Earnings: What's in the Cards?

Charter Communications CHTR is scheduled to report its first-quarter 2025 results on April 25.

The Zacks Consensus Estimate for first-quarter 2025 revenues is pegged at $13.66 billion, indicating a 0.10% decrease from the figure reported in the year-ago quarter.

The consensus mark for earnings is pinned at $8.53 per share, which has been revised downward by 0.8% over the past 30 days. The figure suggests a 12.98% increase from the year-ago reported figure.

CHTR surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters, and missed once, with an average positive surprise of 5.24%.

Charter Communications, Inc. Price and EPS Surprise

Charter Communications, Inc. price-eps-surprise | Charter Communications, Inc. Quote

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Let us see how things are shaping up for the upcoming announcement.

Factors to Consider

Charter Communications is expected to report some financial impact in the first quarter from the wildfires in Southern California. The destruction of approximately 15,000 to 16,000 homes in its service footprint led to lost passings and customer relationships. One-time bill credits and infrastructure rebuild costs are likely to have negatively impacted the top line in the quarter under review.

Charter Communications absorbed most of the impact from the end of the Affordable Connectivity Program (ACP) in the fourth quarter of 2024, with approximately 140,000 customer losses tied to the program’s expiration. However, the absence of ACP benefits throughout the first quarter of 2025 might have continued to limit customer growth, particularly in lower-income markets that previously relied on the subsidy for broadband access.

Customer gains from CHTR’s rural expansion might have partially offset subscriber losses in the quarter under review. In the fourth quarter, Charter Communications added 117,000 subsidized rural passings and 41,000 net customers in those areas. With 450,000 new rural passings planned for 2025, the first quarter is likely to have seen early contributions to the top line from this rural initiative.

Charter Communications continued to ramp up its Life Unlimited bundling strategy in the first quarter, combining broadband, mobile, and video services under a new pricing structure. The company began actively selling video alongside broadband late last year. While the full marketing rollout is still underway, early traction from the fourth quarter suggests this strategy is likely to have supported customer retention and helped stabilize revenues in the quarter under review.

Charter is expected to have incurred higher operating costs in the first quarter, driven by increased mobile device sales and marketing expenses tied to the Life Unlimited campaign. Additionally, the continued rollout of advanced offerings like WiFi 7 and 2x1 gigabit services is expected to have added to near-term spending. These investments, while strategic for long-term growth, might have put pressure on margins during the to-be-reported quarter.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not exactly the case here.

Charter Communications currently has an Earnings ESP of -1.86% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat earnings in their upcoming releases:

Clarivate CLVT currently has an Earnings ESP of +7.76% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

CLVT shares have lost 35.3% in the year-to-date (YTD) period. It is set to report its first-quarter 2025 results on April 29.

Affirm AFRM currently has an Earnings ESP of +52.00% and sports a Zacks Rank #1.

AFRM shares have declined 27.9% YTD. It is slated to report its third-quarter fiscal 2025 results on May 8.

Airbnb ABNB has an Earnings ESP of +6.00% and a Zacks Rank #3 at present.

ABNB shares have lost 12.6% YTD. Airbnb is scheduled to report its first-quarter 2025 results on May 1.

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This article originally published on Zacks Investment Research (zacks.com).

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