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Why Charter Communications Stock Sank Today

Charter Communications (NASDAQ: CHTR) didn’t end the stock trading week on a high note. The cable and telecom company published its latest quarterly earnings report Friday morning, and investors reacted with distaste. They traded Charter’s shares down by almost 2% on the day, contrasting unfavorably to the S&P 500 index’s 1% increase.

Flat revenue in the first quarter

In its first quarter, Charter’s revenue came in at $13.7 billion, which was basically flat over the same period of 2023. Net income based on generally accepted accounting principles (GAAP) saw better improvement, rising by 8% year over year to $1.1 billion, equating to $7.55 per diluted share.

Neither metric met the average analyst estimate. Collectively, prognosticators tracking the company were modeling $13.75 billion on the top line and $7.86 for per-share net income.

Charter, whose business is a mix of legacy cable service providing and telecom offerings, benefited from a nearly 2% increase in its take for internet services (to $5.8 billion). Other revenue drivers include mobile telephony; while this isn’t a huge category for Charter, nevertheless its sales grew by a robust 38% to $685 million. These gains were offset by a more than 8% decline in video revenue to $3.9 billion.

The company did not proffer guidance for either its current quarter or the full year.

A stodgy stock, some believe

Charter’s first-quarter performance wasn’t awful despite the double miss, but it wasn’t inspiring, either. The company is also burdened by its involvement in cable TV, a business that is considered old and lumbering by many investors. They will likely only get excited about Charter stock if the company makes some kind of big move or starts to produce outstanding results in several of its businesses.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Charter Communications Stock Sank Today was originally published by The Motley Fool



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