Cable and broadband giant Charter Communications, reporting its first-quarter results on Friday, posted another pay-TV user loss as the company added mobile phone users, while residential Internet customer growth slowed.
The company, led by its new president and CEO Chris Winfrey, lost 241,000 pay TV subscribers in its latest quarter, compared with a loss of 112,000 in the year-ago period. The latest pay-TV customer losses follow Charter introducing rate increases to pass through higher programming expenses.
Charter, in which John Malone’s Liberty Broadband has a big stake, ended the quarter with an overall pay-TV footprint at 14.9 million customers amid increased cord-cutting by TV viewers in the U.S. market. Comcast, which rivals Charter in size as a cable pay-TV provider, reported a loss of 614,000 video customers during its recent first quarter as the consumer shift to streaming platforms gathers pace.
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On an analyst call, Winfrey said Xumo, an upcoming streaming platform joint venture involving Charter and Comcast, would help stem pay-TV losses as a “very compelling product.” He added video package sales to subscribers took longer as discussions included potentially bundling Internet and mobile phone services.
Charter continues to sell and market traditional video packages alongside its mobile and broadband products as its pay-TV bundle continues to come under pressure from streaming competition. The Xumo offering will encompass streaming devices, content and a streaming platform.
Charter has yet to announce a launch date for Xumo, but Winfrey said the streamer offering expects to be fully deployed by the end of the year.
First-quarter residential Internet customers increased by 67,000 amid stiff competition from existing broadband service rivals, compared to an increase of 164,000 customers during the first quarter of 2022. Charter added 686,000 new mobile phone subscribers during the latest quarter, compared to a year-earlier 373,000 customers signed up, as the mobile phone division continues to grow faster than anywhere else in the company.
First-quarter revenue at Charter rose 3.4 percent to $13.7 billion, driven by higher mobile device sales. Net income attributable to Charter shareholders fell 15 percent to $1.02 billion, or $6.65 per-share, against $6.90 in per-share earnings in the first quarter of 2022.
Shares in Charter fell $13.00, or nearly 4 percent, to $329.75 in pre-market trading on Friday.
