What Happened?
Shares of cable, internet, and telephone services provider Charter (NASDAQ: CHTR) jumped 14.1% in the afternoon session after the company reported impressive third-quarter earnings that slightly topped analysts' revenue and EPS expectations. However, the important story is the moderation in customer losses following the end of the Federal subsidy program. Notably, Internet customers decreased by 110,000, much better than the estimates for a 267,000 decline. Similarly, the company lost 281,000 home video subscribers, compared to an estimate of a 368,000 decline. Overall, this was a much better quarter than anticipated.
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What The Market Is Telling Us
Charter’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for Charter and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 17.6% on the news that the company reported second-quarter earnings results. Charter beat analysts' total internet customers and adjusted EBITDA expectations. Free cash flow also improved significantly (came in at $1.3B) and was above analysts' estimates. Overall, this was a really good quarter that should please shareholders.
Charter is down 6.5% since the beginning of the year, and at $366.09 per share, it is trading 12.9% below its 52-week high of $420.11 from November 2023. Investors who bought $1,000 worth of Charter’s shares 5 years ago would now be looking at an investment worth $768.32.
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