(Reuters) – Charter Communications missed quarterly profit estimates and posted a surprise drop in broadband subscribers on Friday, as it grappled with promotional offerings from rivals in a highly saturated market.
The broadband and cable TV operator’s shares tumbled more than 8% in premarket trading.
Stiff competition across broadband and wireless mobile and the decline of traditional television have been causes of concern, with Charter trying to expand its reach into rural areas in an effort to boost subscriber and earnings growth.
Charter’s internet customers decreased by 61,000 in the fourth quarter, compared with expectations for 17,290 additions, according to Visible Alpha.
“Internet growth in our existing footprint has been challenging, driven by admittedly more persistent competition from fixed wireless and similar levels of wireline overbuild activity,” CEO Chris Winfrey said on a post-earnings call, adding that new investments will help drive growth despite the “temporary challenges”.
Last week, rival Comcast had reported a loss of 34,000 broadband customers, fewer than expectations, but exceeding the 18,000 broadband customers it lost in the previous quarter.
Charter reported earnings of $7.07 per share for the quarter, missing estimates of $8.73, according to LSEG data.
Its video revenue fell 8.1%, with the company losing 257,000 video subscribers during the quarter, compared to a loss of 144,000 in the previous year.
This was partly driven by disconnections related to the temporary loss of Disney programming in early September and rate impacts that occurred during the third quarter.
Charter’s revenue for the fourth quarter edged up 0.3% to $13.71 billion, in line with expectations.
(Reporting by Harshita Mary Varghese; Editing by Maju Samuel)
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