Charter Communications Stock Surges as Q4 Subscriber Losses Beat Fears
Charter Communications (NASDAQ: CHTR) saw its shares rally sharply on Friday, closing up 7.6% at $206.12, as investors welcomed a key metric that eased concerns about subscriber erosion. The company's latest quarterly update showed a net loss of 119,000 internet customers, a figure notably better than the 131,970 decline forecast by Visible Alpha analysts.
This relative strength in broadband, a critical segment for the cable operator, provided a positive counter-narrative to broader financial headwinds. Charter also reported a net gain of 44,000 video customers, a stark reversal from a loss of 123,000 in the year-ago period. Company executives attributed the improvement to new, simplified pricing and packaging launched in September 2024, as well as the inclusion of popular streaming apps in its Spectrum TV packages.
However, the quarterly report was not without its challenges. Charter's net income attributable to shareholders fell 9.1% year-over-year to $1.33 billion, pressured by lower Adjusted EBITDA, costs tied to its pending acquisition of Cox Communications' assets, and higher tax expenses. Total revenue dipped 2.3% to $13.6 billion, weighed down by lower residential video revenue and political ad sales. These declines were partially offset by growth in residential internet, mobile services, and equipment revenue, alongside a $37 million customer credit related to recent hurricanes.
The market's reaction highlights how investor sentiment for telecom and cable stocks remains highly sensitive to subscriber trends, often prioritizing them over near-term profit fluctuations. Charter's performance suggests its strategic shifts to retain video customers and slow broadband losses are gaining traction.
Market Voices
David Chen, Portfolio Manager at Horizon Capital: "This is a classic 'less bad is good' scenario. The broadband number was the key fear, and Charter cleared that lowered bar. It shows their network investment and bundling strategy might be stabilizing the customer base, which is the foundation for any future turnaround."
Rebecca Shaw, Telecom Analyst at ClearView Research: "Let's not get carried away. They still lost over a hundred thousand internet subscribers. This is a company facing existential threats from fiber and wireless home internet. A single quarter's slightly better metric doesn't change the secular decline story. The pop in the stock feels more like short-covering than genuine conviction."
Michael Torres, Small Business Owner & Charter Customer: "As a customer, I just switched to their new mobile-internet bundle, and it's saving me money. Maybe others are doing the same. It's good to see they're finally competing on price and simplicity, but the service reliability in my area still needs work."
Priya Mehta, Independent Market Commentator: "The video customer rebound is a genuine surprise and a credit to management's packaging agility. It proves that even in a streaming-dominated world, there's value in aggregation and a single bill. This could be a blueprint for other legacy providers."