(Bloomberg) — Comcast Corp. had its worst one-day drop in more than 13 years after its prized internet business added no new customers last quarter, an absence of growth not seen in decades, due to a housing slowdown and heavy competition.
The largest US cable TV provider had added broadband customers in every quarter since at least 2005, according to data compiled by Bloomberg. Analysts were looking for around 83,000 new subscribers in the second quarter, and none of them predicted the gain would be in fact, zero.
The shares fell 9.1% to $39.41 Thursday in their biggest slump since December 2008. Rival Charter Communications Inc., which reports earnings on Friday, tumbled 8.5%.
“We expect the stock to face pressure absent forward-looking comments that suggest an improvement in broadband trends,” New Street Research analyst Jonathan Chaplin wrote of Comcast.
As home buying slows and competition among fiber and wireless broadband providers intensifies, the prospects of Comcast and its cable peers returning to prepandemic internet growth has become more challenging.
Comcast executives said on a call with analysts that they won’t “chase” price cuts in the face of cheaper competition. They view the downturn in broadband growth as a short-term issue that has been compounded by a slowdown in the US economy. Fewer people buying homes and moving resulted in a dropoff of new installations.
Cable TV isn’t faring any better with the influx of streaming services. Comcast shed a record 521,000 video subscribers in the second quarter, a bigger loss than analysts had projected.
Subscribers to the Peacock streaming service also “stayed relatively flat” in the second quarter, Comcast said in a statement. The money-losing service had seen a surge earlier this year due to the Olympics.
Bright Spot
At the same time, profit is outpacing Wall Street expectations. Earnings, excluding some items, were $1.01 in the quarter, topping the average analyst estimate of 91 cents. Revenue also came in slightly ahead of estimates for the period.
On the wireless front, Comcast’s Xfinity Mobile continues to gain customers. The company added 317,000 new mobile subscribers, beating the 308,000 average estimate.
Another bright spot: NBCUniversal, Comcast’s entertainment division, generated better-than-expected results, thanks in part to theme parks, which outperformed for a second straight quarter, and the success of movies including “Jurassic World: Dominion.”
(Updates trading in first and third paragraphs.)
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