Charter Communications Inc. (NASDAQ:CHTR) shares dropped 5.05% in premarket trading on Friday after the cable and broadband provider reported second-quarter results that topped earnings expectations but missed revenue forecasts, with continued customer losses in its internet business weighing on investor sentiment.
Although profitability exceeded Wall Street estimates, weaker revenue and declining broadband subscriptions overshadowed the stronger earnings performance.
Earnings beat expectations despite lower revenue
Charter reported adjusted earnings of $10.66 per share for the second quarter, comfortably ahead of analysts’ consensus estimate of $10.00 per share.
Revenue totaled $13.5 billion, down 1.7% from the same period last year and slightly below the market forecast of $13.52 billion.
The company attributed the decline primarily to weaker residential video revenue and a reduction in internet subscribers during the quarter.
Internet customer losses continue
Charter ended the quarter with 29.4 million internet customers after losing 172,000 subscribers during the period.
Internet revenue declined 3.2% year-on-year to $5.8 billion, reflecting ongoing competitive pressures in the broadband market.
Video subscriptions also continued to fall, with the company reporting a net loss of 21,000 customers, leaving its total video subscriber base at 12.5 million. However, that represented an improvement from the loss of 80,000 customers recorded in the same quarter a year earlier.
Mobile business remains a bright spot
Wireless services continued to deliver solid growth for the company.
Charter added 406,000 mobile lines during the quarter, increasing its total mobile customer base to 12.5 million, a 15.5% increase compared with a year earlier.
Mobile service revenue climbed 18.9% year-on-year to $1.1 billion, highlighting the continued expansion of the company’s wireless business.
“We operate in a competitive environment across all of our products, and our strategy for growing connectivity services is simple — deliver the best products, at the best overall value, with the best service,” said Chris Winfrey, President and CEO of Charter.
Cash flow and capital investment remain in focus
Adjusted EBITDA declined 4.3% from the prior year to $5.4 billion.
Excluding transition expenses associated with the previously announced Cox transaction, the company said adjusted EBITDA would have declined 3.2%.
Free cash flow totaled $969 million during the quarter, down $77 million from a year earlier, primarily due to changes in accrued capital expenditure-related expenses.
Charter also repurchased 4.0 million shares for $838 million during the period and reaffirmed its full-year 2026 capital expenditure guidance of approximately $11.4 billion, excluding the impact of the proposed Cox transaction.
Charter Communications stock price
