Charter Communications Inc. (CHTR), the second-place cable TV operator, was able to post fourth-quarter results that easily surpassed Wall Street views.

For the period ended Dec. 31, Charter reported net income of $454 million, or $1.67 a share, which compares to a loss of $122 million or $1.21 a share in the year-earlier fourth quarter. Analysts, according to FactSet had expected Charter to weigh in with earnings of $1.05 a share. Revenue of $10.28 billion was also higher than the analyst consensus for revenue of $10.23 billion.

Decline in Video

During the quarter, Charter said it added 345,000 customers, but it lost 51,000 on the video side. In its residential business, Charter said video revenue increased 1.9% while internet revenue increased 13.3% and revenue from its voice business declined 0.5% from last year’s fourth quarter. Charter recently acquired Time Warner Cable and Bright House Cable, which expands its footprint in the broadband and cable markets. (See also: Charter and TWC Receive FTC Merger Approval.) 

The decline in video subscribers comes at a time when countless consumers are cutting the cord on their set-top boxes, favoring streaming video content that doesn't require a costly device. There are fears in the marketplace cable companies are going to lose more customers to over-the-top streaming video services. 

Focus on Integration

“Since the close of our transactions in May, we have been managing the complicated process of integrating three different companies with over 26 million customers and 90 thousand employees. Despite the complexity, our integration is going well. We also continued to grow in 2016, with pro forma customer growth of nearly 5%, revenue growth of 7%, and double digit adjusted EBITDA growth,” said Tom Rutledge, chairman and CEO of Charter, in a press release announcing fourth-quarter results. “In 2017, we remain focused on applying our growth oriented operating strategy across our new footprints, driving more customer satisfaction, growth, and shareholder value.”

During the quarter, speculation has abounded that Charter could be a takeout target for one of the telecom players looking to expand more into video. Verizon Communications Inc. (VZ) is seen as the most likely suitor with Chief Executive Lowell McAdam expressing interest in a deal. While Charter's Rutledge has brushed off calls for Charter to buy a content company, he didn’t dismiss the idea of a deal with another cable company.