Losing TWC suitor Charter shares fall

• %2439 million quarterly profit equal to 35 cents a share
• CEO%3A Charter remains interested in cable mergers
• Cablevision%2C Cox seen as potential partners

Charter Communications shares fell Friday after the cable TV and communications firm that lost a bid to buy larger rival Time Warner Cable, reported a fourth-quarter profit of $39 million.

The increase, equivalent of 35 cents a share, represents a turnaround from the loss of $40 million, or 41 cents a share, Charter reported for the same period a a year earlier. The Stamford, Conn.-based company said revenue rose 12% to $2.15 billion, up from $1.91 billion a year earlier.

The financial results were announced after Comcast trumped Charter's attempt to acquire larger rival Time Warner with a $45.2 billion merger agreement.

Charter CEO Tom Rutledge told Wall Street analysts Friday the company remains interested in pursuing expansion via a cable merger "when that opportunity arises." But he did not comment on the status of Charter's Time Warner bid.

Wall Street investors seemed unhappy with the news, sending Charter shares down more than 5% to a $125.08 close in Friday trading. The stock was later up to $127.49 a share in aftermarket trading.

In the quarterly earnings announcement Rutledge said the company plans to complete an all-digital initiative this year. He said the plan, combined with improved service capability and higher customer satisfaction "are expected to result in greater market share and improving cash flow . . . as we position Charter for long-term growth and value creation."

The company, urged on by billionaire board member John Malone, had aggressively courted Time Warner. Charter even notified the New York City-based rival on Feb. 11 that it had nominated a full slate of 13 independent candidates for Time Warner's board.

But Comcast CEO Brian Roberts cut in two days later, announcing the merger agreement that would combine his Philadelphia-based firm, the nation's biggest cable TV provider, with number two Time Warner.

Charter, the fourth-largest cable TV provider, in 2013 completed a $1.62 billion purchase of Cablevision Systems' Bresnan Broadband Holdings. That deal added 63,000 residential customers, the company said Friday.

Potential new acquisition partners for Charter amid a continuing consolidation of the cable TV sector include Cox Communications and Cablevision.

There "are at least a few baby elephants left on the M&A savanna," Wunderlich Securities analyst Matthew Harrigan told Reuters Friday.