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Charter Communications (NASDAQ:CHTR) slid 15% Friday in its worst day in over a year, as the company missed profit expectations and surprised investors with a decline in broadband subscribers to go along with a now-standard drop-off in cable video customers.
Revenue ticked up barely to $13.7B, in line with expectations, thanks to gains on the residential side.
But net income fell 11.5% to $1.06B, with margin dropping a full percentage point; the company blamed that drop mainly on a pension remeasurement loss and higher interest expenses.
Earnings per share of $7.07 missed expectations for $8.84. Adjusted earnings before interest, taxes, depreciation and amortization ticked up 1.6% year-over-year to $5.6B.
Meanwhile, operating metrics disappointed. The company’s Internet subscribers (residential and small/medium business) fell by 61,000 in the quarter, trimming the full-year addition total to 155,000 adds.
Total video customers — undergoing a long secular decline overall — fell by 257,000 in the fourth quarter. Voice-line customers fell by 251,000.
The bright spot was mobile lines, which grew by 546,000 to 7.77M lines overall.
Revenues by segment: Internet, $5.81B (up 3%); Video, $3.91B (down 8.1%); Voice, $393M (up 3.8%); Mobile Service, $626M (up 35.7%); Small and Medium Business, $1.08B (down 0.9%); Enterprise, $700M (up 3.8%); Commercial revenue, $1.78B (up 0.9%); Advertising sales, $428M (down 23.4%); Other, $771M (up 24.4%).
Weaker-than-expected core and rural subsidized trends sank the broadband losses number, J.P. Morgan analyst Sebastiano Petti wrote. That came even amid slower growth at Charter’s rivals, he noted: “Was the 4Q slowdown a one-off event, or can Charter return to broadband growth in ’24?” And he questioned whether growth came accelerate in 2024 as Disney programming costs come on line.
Other cablecos fell in sympathy Friday: Key rival Comcast (CMCSA) was down 3.4%, while Liberty Broadband (LBRDK) tumbled 16.1%. Altice USA (ATUS) slid 13.9%; WideOpenWest (WOW) -8.6%; CableOne (CABO) -8.7%.