Spectrum TV parent Charter Communications warned investors on Friday that they could face financial and subscriber impacts due to the Los Angeles wildfires, which will reflect in its quarterly results for the first quarter of 2025.
“We’re still assessing impacted areas and we expect to incur capital expenditures to recover and rebuild lost passings. We’ve been providing bill credits to customers in impacted areas, and those one-time credits will offset some first quarter revenue,” chief financial officer Jessica Fischer told analysts during the company’s fourth quarter 2024 earnings call on Friday. “We may also have some incremental operating expense, although we expect that to be relatively small, and we’ll isolate the impact the fires when we report our first quarter results.”
Executives praised the company’s frontline employees, who have been working around the clock to help reestablish connectivity despite losing their own homes. As of Thursday, Spectrum said its teams on the ground had completed construction of more than 30 miles of fiber and coax plant to date, reconnecting thousands of homes and businesses.
“We’re really proud of how our frontline employees have responded and from Stanford, we learned some lessons on how to put customers at ease sooner. We got better with their communications along the way,” Charter CEO Chris Winfrey added. “Part of our customer commitment is to always improve.”
In addition to the bill credits, Spectrum has committed $2.5 million towards wildfire relief efforts, including $500,000 in cash contributions split between the Los Angeles Fire Department Foundation, American Red Cross Los Angeles Region and the California Fire Foundation; $1 million committed to support small businesses in the Los Angeles area through the Spectrum Community Investment Loan Fund; and $1 million in in-kind public service announcement (PSA) airtime to support nonprofit organizations in their wildfire relief efforts.
It also established a microsite to facilitate employee donations to the American Red Cross, opened more than 35,000 out-of-home WiFi access points across Southern California to be available to all users at no cost and is providing Red Cross locations and other service organizations who are Spectrum customers with a free upgrade to 1 Gig service.
Additionally, Spectrum is offering free 1 Gig service through the end of February to service organizations providing support during the wildfires that are not currently Spectrum subscribers and is supporting employees by helping with costs related to temporary housing, transportation and the purchase of food and other essential items.
In its fourth quarter, Charter reported a loss of 177,000 Internet customers for a total of 30.1 million and shed 123,000 video customers for a total of 12.3 million.
In addition to dealing with continued cord-cutting due to increased competition from streaming services and vMVPDs like YouTube TV, Charter’s results in the quarter were impacted by hurricanes Helene and Milton, which hit the U.S. in late September and early October 2024. The storms accounted for over 20,000 Internet disconnects and a reduction in EBITDA of approximately $35 million, primarily driven by hurricane-related customer credits and revenue. The storms also drove approximately $125 million in total incremental capital expenditures.
Despite the customer losses, shares of Charter are up over 3% during Friday’s trading session after it beat Wall Street expectations for the quarter, with earnings per share of $10.10 and total revenue growth of 1.6% to $13.9 billion, driven by residential mobile service and residential Internet revenue growth of 37.4% and 0.9%, respectively, and advertising sales revenue growth of 26.4%. Analysts surveyed by Zacks Investment Research were expecting EPS of $9.54 and revenue of $13.8 billion.
