Charter’s Subscriber Weakness Fuels Fear of Broadband Slowdown
(Bloomberg) -- Charter Communications Inc. shares declined after the U.S. cable company reported internet subscriber growth that fell short of Wall Street’s expectations.
Charter, which sells TV, phone and internet service under the brand name Spectrum, added 265,000 broadband customers in the third quarter, the company said Friday in a statement.
That was about 25% fewer than analysts expected, “raising questions about whether this is the beginning of the end of the cable broadband story,” said Geetha Ranganathan, an industry analyst at Bloomberg Intelligence.
“While the overall softness seems due to the aftereffects of Covid-19, the question about where normalized trends will settle remains,” she said.
Read more: Charter’s performance has Wall Street worried
Charter shares fell 4.3% at 9:32 a.m. in New York. Its stock rose 6.8% this year through Thursday’s close, compared with a 22% gain in the S&P 500.
On Thursday, Comcast Corp. said it had also seen a slowdown in broadband subscriber growth in the third quarter, citing fewer people moving homes, which means fewer opportunities to win new subscribers.
On an earnings call Friday, Chris Winfrey, Charter’s chief operating officer, cited a similar dynamic, saying “residential customer activity” was “taking longer than we expected to return to normal levels.”
He said Charter now expects internet subscriber growth for the year to be more like 2018 than 2019.
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