Charter’s Broadband Subscriber Losses Add to Woe for Cable TV

(Bloomberg) — Charter Communications Inc. shares rose as much as 7.2% after the company reported better-than-expected fourth quarter results, including revenue and profit gains, as well as video-customer declines that were less than Wall Street had projected.

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The company, which operates under the Spectrum brand, parted ways with 123,000 home-video customers compared with estimates for losses of 270,200. Overall, revenue at Stamford, Connecticut-based Charter rose 1.6% to $13.9 billion in the quarter, meeting analysts’ projections. Diluted earnings per share were $10.10 surpassing the projected $9.08.

Shares were up 3.6% to $348.70 at 10:41 a.m. in New York.

The company shed 177,000 broadband subscribers in the fourth quarter, worse than expected amid a very competitive market for internet access. Analysts had forecast a loss of 142,000 residential and business internet customers, according to data compiled by Bloomberg.

Chief Financial Officer Jessica Fischer said on a call with investors Friday morning that the company performed well in light of hurricanes Helene and Milton, which pummeled the southeast US, and the final wind-down of the Covid-era Affordable Connectivity Program that subsidized low-cost internet plans and inflated subscriber numbers.

“We continue to compete well across our footprint,” she said.

Charter is fighting competition from the likes of AT&T Inc., Verizon Communications Inc. and T-Mobile US Inc., which are siphoning off home internet subscribers. It’s also battling an industrywide shift by consumers from pay-TV subscriptions to streaming. Charter is the largest cable-TV provider in the US with 12.9 million video customers and 31.5 million customers overall.

Cable and telecom companies are moving toward a “convergence” model, where they offer internet, mobile phone and other services. Charter added 529,000 new mobile lines in the quarter, while rival Comcast Corp. reported 310,000 new wireless lines on Thursday.

Fischer noted that Charter’s 2024 full-year revenue was buoyed, in part, by higher mobile-device sales.

Comcast’s earnings a day earlier beat Wall Street’s expectations for revenue and profit but still reflected subscriber losses in its broadband unit, concerning investors. Comcast shares tumbled 11% on Thursday to their lowest in more than two years, also dragging down Charter’s stock.

Charter is planning a major marketing push this year to promote more than 10 streaming services it will offer at no additional cost to customers — launching an ambitious strategy to head off cancellations and attract new subscribers. It’s also increasing efforts on bundling strategies for internet, voice and video packages that can help curb losses from cable programming customers.

In September, it announced a revamped pricing structure that allows customers to pick price-guaranteed bundles, including a $30 internet plan with two mobile lines and Spectrum Video service. On Friday, Chief Executive Officer Christopher Winfrey expressed optimism about the strategy.

“We felt confident enough beginning in late September to start selling video again actively together with our broadband subscriptions as a way to create value and utility in the overall package, not just for video, but really to add value back into the broadband relationship,” he said on the call.

(Updates with changes in share price, additional customer numbers in the seventh paragraph and quotes from company executives)