After reporting on Friday a loss of 61,000 broadband subscribers in the third quarter, Charter Communications has taken a hard hit on Wall Street, with shares declining 19% from $382.34 at end-of-day trading on Thursday, February 1.
Equity analysts had expected narrow growth for Charter’s broadband unit, which lost 62,000 residential customers while gaining 1,000 business accounts in the fourth quarter.
Also read: Charter Reports Video, Internet Subscriber Losses for Q4
“We’ve long argued that Charter doesn’t need to show ‘broadband re-acceleration.’ They merely need to show that broadband unit results are predictable enough, at a level reasonably close to zero or slightly better, to allow for focus on all the other good things that are happening (wireless, ARPU growth, margins),” analyst Craig Moffett wrote in a note to investors Friday. “Today’s report is a frustrating reminder that they aren’t there yet. For better or for worse, the focus will remain on broadband net adds until Charter can prove that the focus can safely be directed elsewhere.”
As this other graphic from Moffett’s report shows, Charter’s “dispiriting” broadband was declining as passings growth accelerated.
As Moffett noted, a lot could change for Charter in the coming months as to render such customer growth data less meaningful. For example, wireless unit Spectrum Mobile, which added 2.5 million lines in 2023, could start generating more revenue.
Or broadband ARPU (average revenue per user) could accelerate, as has been the case for Comcast.
Until that time, the analyst added: “You can’t fight the zeitgeist. It’s all about broadband net adds.”
