Charter Stock Jumps After Rare Pay-TV Subscriber Gain In Q4

Charter shares jumped as much as 12% in early trading Friday after the company reported a rare uptick in video subscribers and fewer broadband losses than expected in the October-to-December quarter.

In the quarter ended December 31, Charter added 44,000 video customers, compared with a loss of 123,000 in the year-earlier quarter. It ended the year with 12.6 million video customers, making it the No. 1 pay-TV operator in the U.S.

Internet subscriber levels dipped by 119,000, which was better than analysts’ consensus outlook for a loss of 132,000.

The subscriber numbers appeared to encourage investors despite Charter’s mixed financial results in the quarter. Total revenue fell 2% from the year-ago quarter to settle at $13.6 billion, missing Wall Street forecasts by more than $100 million. Earnings per share of $10.34 topped expectations for $9.82.

During a conference call with analysts, CEO Chris Winfrey said the video subscriber gains were due to a strategic push to integrate streaming services into many TV and broadband packages at no extra cost.

“Our goal is to have a video product that supports broadband acquisition and broadband retention, and I think it’s a powerful tool to do that if we can provide value and utility for customers,” he said. While he said the company is “pleased” with the idea of adding video subscribers, he considers it a “nice side benefit,” but it’s “not what our shareholders ask us to do.”

Starting in 2023, when Charter waged a high-profile carriage battle with Disney, the operator has pursed a playbook of trying to include streaming as a key component of distribution deals. As a result, customers of the company’s Spectrum TV Select video service now get as much as $117 per month in value from the inclusion of ad-supported versions of Disney+, ESPN Unlimited, HBO Max, Paramount+, Peacock and other services. After Discovery+ and BET+ launch later this year, the benefit will be about $129 a month, the company says.

Charter’s share price gains Friday come after a lean period for the stock. It has fallen about 30% over the past year as the company has reported slippage in its long-reliable broadband business and investors have also questioned the debt it planned to take on as it looks to complete the acquisition of Cox Communications.

The Charter-Cox deal is expected to close in the middle of 2026. On the earnings call, CFO Jessica Fischer announced that Charter had updated its projection for its leverage to the low end of a new target range of between 3.5 times and 3.75 times debt to trailing earnings. The previous goal was the midpoint of a 3.5 times to 4 times range.

The shift should “positively affect valuation,” Fischer said, and “attract a broader constituency of holders to the stock.”

Midway through the trading day, Charter stock eased to about $208 a share, still up 9% for the day on above-average trading volume.