Charter shares closed down more than 8% on Tuesday after its CFO Jessica Fischer said the company could lose broadband subscribers in the fourth quarter.
Shares in Charter’s rival Comcast also closed down more than 3%.
“I can certainly see that it’s likely that we could end up with negative Internet net adds in the fourth quarter,” Fischer said at the UBS Global Media and Communications Conference. The company lost subscribers in October, partly due to the impact of its dispute with Disney and higher interest rates, and November was “similarly soft”, Fischer said.
Charter added more than 60,000 broadband customers in the third quarter of this year. Comcast said it lost 18,000 broadband customers in the third quarter.
Charter has invested billions in efforts to expand its broadband coverage to rural and underserved communities. The company spent $1.1 billion on line extensions in the third quarter, driven by rural expansion efforts.
But adding lines doesn’t add much value if people aren’t buying homes. The housing market has suffered in recent months as buyers and sellers grapple with rising interest rates and tight supply. Mortgage demand is also at its lowest level in almost 30 years.
Still, Fischer believes Charter will return to subscriber growth, citing a potential rebound in the housing market. Adding “value back into video”, referring to Disney and Charter’s deal to include Disney+ in some Spectrum plans, will also boost Charter’s competitiveness, Fischer added.
