UPDATED with closing prices. Charter Communications shares plummeted 25.5% Friday, their biggest single-day sell-off, after the company delivered first-quarter results that disappointed Wall Street.
Earnings per share of $9.17 on a diluted basis fell well short of analysts’ consensus estimate of $10.63. Total revenue dipped 1% to $13.6 billion, hitting the Street’s target.
Charter lost 120,000 broadband customers during the quarter, more than twice the decline of 59,000 in the year-earlier period. The downturn was bigger than the 100,000 losses projected by analysts.
Shares in Charter closed at $180.13 after touching $178, their lowest point in more than 10 years. They are down 14% in 2026 to date. Rival Comcast’s stock, after rising sharply Thursday on the company’s strong earnings report, also got dragged down due to investor worries about its troubled broadband operation. It closed Friday at $27.51, down 13%. Comcast execs on their Thursday call offered extensive commentary about the state of a multi-year turnaround effort in their Connectivity division, acknowledging struggles with broadband.
Video, for a change, was a less-discouraging area for Charter, which shed 51,000 residential video customers and 60,000 overall. The losses were narrower than the estimated decline of 85,872. Charter’s earnings release credited “simplified pricing and packaging and benefits from the inclusion of programmers’ streaming applications in Spectrum’s expanded basic video packages.”
Charter had 12 million residential video customers at the end of the quarter. For now, that makes the company the No. 1 pay-TV provider in the U.S. YouTube TV passed 10 million subscribers last year, according to programmers negotiating distribution deals with them, and is expected to become the top operator soon.
The number of mobile lines, for both residential and small business customers, increased 17% over the prior-year quarter to reach 12.1 million. The mobile business has been growing significantly for Charter, Comcast and other cable operators. While the segment has been a welcome bonus for the companies, they don’t own wireless spectrum and must rely on wholesale agreements with Verizon and other partners, which limits the upside.
During a conference call with analysts after the earnings release, company execs tried to keep the focus on their pending $34.5 billion merger with smaller competitor Cox Communications. The deal will deliver $800 million in synergies, CFO Jessica Fischer estimated, with the exec and CEO Chris Winfrey detailing many ways they see the two companies’ strengths making for a better combined entity. The FCC and the DOJ have signed off on the merger, which Charter expects to close by the summer.
Source: Read Full Article
