Charter's stock leads S&P 500 decliners as company signals near-term caution about broadband

By Emily Bary

Charter CFO acknowledges possibility of net subscriber losses in internet business for fourth quarter

Cable companies haven't had an easy time increasing their internet subscribers in postpandemic times, and while Charter Communications Inc. is upbeat about the long-term potential of its broadband business, its chief financial officer issued a more cautious signal Tuesday about the near term.

Charter (CHTR) was embroiled in a video-carriage dispute with Walt Disney Co. (DIS) in the early part of September, and Chief Financial Officer Jessica Fischer explained at a UBS conference Tuesday that the company saw some "carryover churn" related to that and to rate impacts in October. "November has been similarly soft," she added, according to a transcript from AlphaSense/Sentieo.

See also: Charter sees video losses swell after Disney dispute

"So I can certainly see that it's likely that we could end up with negative internet net adds inside of [the fourth quarter]," Fischer said. "But I want to be really clear that we think that ... the opportunity in the overall broadband market and our position around sort of how we see total broadband opportunity in the long term has not changed."

Analysts tracked by FactSet had been modeling 85,700 internet net additions for the fourth quarter.

Shares of Charter were off about 9% in Tuesday afternoon trading and were leading S&P 500 SPX decliners. Peer Comcast Corp.'s stock (CMCSA) was down more than 3%.

Fischer's optimism about the broadband landscape over the long haul stems in part from her view of the housing market. She expects growth there, and she thinks Charter's rural builds will pay off.

"We continue to compete well against fiber," she said. "We're bringing a lot of value to market in the mobile products that we're providing to customers by saving them hundreds of dollars a year."

Charter offers wireless plans through a mobile virtual network operator relationship with Verizon Communications Inc. (VZ), and the company bundles wireless service with its internet plans.

-Emily Bary

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12-05-23 1558ET

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