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Investing.com -- Charter Communications (NASDAQ:CHTR) stock fell 6.3% following Comcast (NASDAQ:CMCSA)’s report of significant broadband subscriber losses, which also dragged its own shares down by 11%. The ripple effect on Charter’s stock comes ahead of its own earnings report, scheduled for tomorrow.
Comcast’s fourth-quarter results revealed a loss of 139,000 broadband customers, exceeding FactSet estimates of a 91,000 loss. This decline was attributed in part to the impact of Hurricanes Milton and Helene, which disrupted operations in Florida. Despite the subscriber downturn, Comcast’s overall revenue increased by 2.1% to $31.92 billion, surpassing the expected $31.64 billion, according to LSEG data. Its adjusted earnings per share also exceeded expectations by 10 cents.
The broader implications for cable companies became evident as Bloomberg Intelligence analyst Geetha Ranganathan commented on Comcast’s results. "Comcast’s worse-than-expected decline of 139,000 broadband subscribers in 4Q was mostly due to intense competition from fixed wireless access (FWA) and fiber, suggesting that cable companies like Charter will be severely pressured in 2025," she said. This projection hints at a challenging landscape for Charter Communications as it faces similar market forces.
Comcast’s earnings highlighted a mixed performance across its divisions. Blockbuster releases like "Wicked" helped drive a nearly 7% increase in studio revenue, while the Peacock streaming service saw a 27.8% revenue increase following price hikes. However, the subscriber count remained flat at 36 million. Additionally, Comcast’s cable TV networks experienced a loss of 311,000 subscribers, attributed to the ongoing trend of cord-cutting.
The company is also preparing for strategic changes, including spinning off select NBCUniversal cable networks to focus on its studio and theme parks business. Despite flat revenue in the theme park division, pre-opening costs for the upcoming Universal Epic Universe led to a 3.9% drop in core earnings.
Investors are now looking to Charter’s earnings report for further indications of the sector’s health and the potential impact of competitive pressures on its performance.
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