Shares of Charter Communications fell 13% Friday morning after the company reported disappointing fourth-quarter earnings and a surprising loss of broadband subscribers.
Charter said it lost 61,000 online customers in the quarter ended Dec. 31, compared with Wall Street analysts’ expectations for a slight gain.
The stock price reached $336.24 on heavier than usual trading volume.
Earnings of $7.07 were down from $7.69 in the same quarter a year earlier and also fell well below analysts’ consensus expectations of $8.73. Total revenue was flat at $13.7 billion, which was in line with Street estimates.
Charter’s broadband woes come on the heels of rival Comcast’s quarterly report last month, which included a loss of 34,000 Internet subscribers, larger than the previous year’s losses. Broadband is seen as a bulwark for longtime cable providers struggling during a period of widespread cord-cutting.
“Internet growth in our existing footprint has been challenging, driven by admittedly persistent competition from fixed wireless and similar levels of excess construction activity for wireline,” CEO Chris Winfrey said during a conference call with analysts. He described the issues in this quarter as “temporary challenges.”
The company said it shed 248,000 residential video customers in the 2023 quarter, compared to a decline of 145,000 customers in the fourth quarter of 2022. The losses were “driven in part by video outages related to the temporary loss of Disney programming in early September” during the year, the company said in a statement. Its profits are a dispute over transportation. Charter finished the year with 13.5 million residential video customers. Consequently, video revenue declined 8% in the quarter.
There was minimal talk about Disney’s battle during the earnings call. Winfrey highlighted the launch of Xumo, a joint venture with Comcast, during the fourth quarter. Xumo aims to offer a streamlined interface for streaming clients. Strategically, Winfrey said it also fits into the company’s plans to “modernize” its distribution agreements in the context of the Disney carriage deal, preventing “customers from paying twice” for video in pay TV and streaming.