Cable Earnings

Charter signed up 310K digital phone subs in ’06, a staggering 309% Y-over-Y surge that’s providing important oil to the MSO’s revving triple play engine. Slower relative growth in digital video adds (+35%), level HSD adds of 305K and a continuing loss of basic customers (74K) may provide some pause, but Charter’s recent refinancing/expansion of $6.85bln in debt could breed optimism. "We believe the company has the opportunity to accelerate financial growth in 2007 as margins improve," read a research note from UBS, which maintained its ‘Buy 2’ rating on Charter shares with a $4.50 price target. — HSD service growth and the recovering Gulf Coast region helped Cable One achieve an 11% Y-over-Y increase in ’06 rev to $566mln and a 56% surge in operating income to $120mln. Even as the MSO counted $12.4mln in lost ’06 rev from the lingering effects of Hurricane Katrina, the Gulf Coast region contributed sub adds of 85K basic (+16%), 32K digital (+15%) and 36K HSD (+50). Overall Cable One added 1.2mln (+5%) RGU’s last year, led by a 24% increase in HSD subs to 289K. — Liberty Media‘s QVC achieved 7% Y-over-Y growth in domestic ’06 rev to $5bln, primarily due to increased sales to existing subs, the co said. Operating cash flow jumped 13% to $1.2bln. ’06 rev at Starz Ent inched up 3% to $1bln while operating cash flow rose 9% to $186mln. Sub growth at Starz (+6%) and Encore (+7%) fueled the rev growth, which was partially offset by a decrease in the effective rate charged for the services. Liberty also plans to purchase up to $1bln of its Liberty Capital Series A and Series B common stock at a range of $105-$113/share. — Discovery‘s US nets saw ’06 rev increase 10% to $1.93bln, spurred by growth in distribution and ad rev across the portfolio. Operating cash flow jumped 13% to $727mln. — ’06 rev for Gemstar-TV Guide‘s cable/satellite segment grew 11% to $302mln, due largely to a 20% surge in TV Guide Interactive rev, an 11% increase in TVG rev and a 4% increase in rev for TV Guide Channel.