Charter Communications Posts Wider Loss in System Upgrades

Charter Communications Inc., the cable-television operator controlled by billionaire Paul Allen, posted a wider first-quarter loss on spending to upgrade its systems to sell digital TV and fast Internet service.

The No. 4 U.S. cable provider’s loss widened to $280.7 million, or $1.20 a share, from $180.7 million, or 81 cents, a year earlier. Sales rose 21% to $873.8 million, a company statement said.

Charter spent about $14 billion buying cable systems in 1999 to form larger geographic clusters of subscribers and more efficiently sell Web access and digital TV with hundreds of channels.

Charter is adding subscribers for those new products and, like other cable companies, said it is not lowering 2001 forecasts even as the economy decelerates. The company reiterated a forecast for sales growth of 14% to 16% this year.

The St. Louis-based company, which will have 6.9 million cable customers after all pending acquisitions are completed, was forecast to lose $1.27 a share in the quarter, the average estimate of six analysts polled by First Call/Thomson Financial. Deutsche Banc Alex. Brown analyst Karim Zia, who has a “strong buy” rating, expected $870.5 million in sales.

Charter shares fell 43 cents, or nearly 2%, to $22 in Nasdaq trading. They had risen 48% in the last year for the second-biggest gain of any U.S. cable stock.