Charter Communications shares slump on Q1 results, dragging down sector peers

[Charter Spectrum Phone, Cable TV, and Internet telecommunications service van is driving to performing a service call - San Diego, California, USA - 2020]
Michael Vi/iStock Editorial via Getty Images

Shares of Charter Communications (CHTR [https://seekingalpha.com/symbol/CHTR]) are facing heavy selling pressure on Friday following the release of mixed first-quarter results that included a decline in revenue and a larger-than-expected loss of broadband customers.

The parent company of Spectrum mobile and internet services added 368K new mobile lines (versus +432K estimates) during the quarter but lost 120K Spectrum Internet customers (versus -100K estimates) amid increased promotions from its competitors.

And although its video service lost 60K customers, it was less than the 85K decline analysts were expecting and compares to a loss of 181K customers in the same quarter last year. This can be attributed to Spectrum’s simplified pricing and packaging, along with the inclusion of programmers’ streaming applications in its expanded basic video packages.

For the first quarter, Charter Communications (CHTR [https://seekingalpha.com/symbol/CHTR]) earned a profit of $9.17 per share in the first quarter, up 9% from a year ago but $0.91 below expectations. Adjusted EBITDA declined 2.2% to $5.6B, compressing adjusted EBITDA margin by 50 basis points to 41.5%.

On the revenue side, a 15.1% increase in mobile service revenue and advertising revenue was unable to fully compensate for losses in internet, video, voice, and residential service, all of which contributed to a 1.1% decline in revenue to a below-consensus $13.5B.

The company’s balance sheet is also weighing on shares as free cash flow decreased 12.5% to $1.4B.

In response to the disappointing results, Charter Communications CEO Chris Winfrey assured investors that “as we continue to improve our products, pricing, packaging, and service, and complete our rural network initiatives, we are poised for improving customer and free cash flow growth.”

The results are weighing on peers within the sector, driving down shares of Comcast (CMCSA [https://seekingalpha.com/symbol/CMCSA]), Liberty Broadband Corp. (LBRDK [https://seekingalpha.com/symbol/LBRDK]) (LBRDA [https://seekingalpha.com/symbol/LBRDA]), Optimum Communications (OPTU [https://seekingalpha.com/symbol/OPTU]), and Cable One (CABO [https://seekingalpha.com/symbol/CABO])

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* Charter Communications GAAP EPS of $9.17 misses by $0.91, revenue of $13.59B beats by $50M [https://seekingalpha.com/news/4579234-charter-communications-gaap-eps-of-9_17-misses-by-0_91-revenue-of-13_59b-beats-by-50m]
* Charter Communications Q1 2026 Earnings Preview [https://seekingalpha.com/news/4578827-charter-communications-q1-2026-earnings-preview]