Warning pummels Charter's stock

By Susan Rush
From The October 2, 2002 Edition Of CED Broadband Direct

Charter Communications Inc.'s stock fell as much as 29 percent in early trading, following news that the MSO has revised its third-quarter growth forecast.

The U.S.'s fourth-largest cable operator has lowered its Q3 operating cash flow growth guidance from 13.7 percent to 13 percent, citing losses in its basic analog customer sector. The company blames this erosion on competition from satellite providers that charge less for digital services.

In August, Standard and Poor's lowered Charter's credit rating from "BB" to "B+." At the same time, Moody's Investors Service downgraded the cable operator's outlook from "stable" to "negative."

Despite the lowered forecast, Charter still expects to be cash-flow positive by the end of next year, fueled in part by a decline in capital expenditures as the company nears completion of its cable systems upgrades.

As of 12:16 p.m. EDT, Charter's shares were off 47 cents, or 23.5 percent, to $1.53. Charter's stock price has plummeted 93 percent since the beginning of the year.