Charter Communications Inc (NASDAQ:CHTR) shares tumbled nearly 7% on Friday after the broadband and cable provider posted third-quarter earnings below Wall Street expectations, as continued subscriber declines weighed on results.
The company reported adjusted earnings of $8.34 per share, missing the consensus estimate of $9.27, while revenue slipped 0.9% year-over-year to $13.67 billion, slightly under the projected $13.75 billion. The decline was mainly attributed to weaker residential video and advertising revenue, partially offset by modest growth in broadband and mobile services.
Charter’s internet business continued to face headwinds, with the company losing 109,000 broadband customers in the quarter — a slight improvement from the 110,000 lost a year earlier. Overall, total customer relationships fell by 149,000 to 31.1 million.
On a more positive note, Charter’s mobile division continued to expand, adding 493,000 new lines and pushing its total mobile base to 11.4 million lines.
“We are operating well in a competitive environment, where consumer products and applications haven’t yet caught up with our uniquely differentiated network capabilities,” said Chris Winfrey, President and CEO of Charter. “In the meantime, our service delivery improvements are being recognized, and we are saving customers hundreds and often thousands of dollars per year with our products.”
Adjusted EBITDA for the third quarter slipped 1.5% year-over-year to $5.6 billion, while free cash flow held steady at $1.6 billion. Lower cash taxes and improved working capital were offset by a 19% increase in capital expenditures, which rose to $3.1 billion.
By segment, residential connectivity revenue — which includes both internet and mobile services — climbed 3.8% year-over-year, while video revenue dropped 9.3% as Charter lost 70,000 video customers. Advertising revenue plunged 21.3%, largely reflecting reduced political ad spending.
During the quarter, Charter repurchased 7.6 million shares of its Class A common stock and Charter Holdings common units, spending roughly $2.2 billion as part of its ongoing share buyback program, underscoring management’s continued focus on shareholder returns despite short-term pressures.