Charter Promises $2 Billion in Savings, but Shares Slide on Subscriber Losses

what happened

Charter Communications unveiled a plan to target $2 billion in cost savings over the next 18 months after closing its Cox merger, Barron's reported. Investors, however, focused on third-quarter results showing Spectrum Internet lost 233,000 customers. Shares fell 6.3% to $117 in early trading and were already down 40% for the year through Thursday's close.

Management said it would reduce complexity, speed up decisions and reallocate resources, and expects about $1 billion in synergies from the Cox deal. CEO Chris Winfrey said “We will return Charter to Internet customer growth.” The company posted a loss of $20.50 a share, and pro forma revenue fell 1.5% from a year earlier to $16.5 billion.

why it matters

The stock's reaction suggests cost cuts alone may not satisfy investors while the broadband base keeps shrinking. Competition from wireless and satellite internet providers keeps pressure on cable operators, so investors will be watching subscriber trends closely.

market impact

Charter shares: subscriber losses outweigh the cost-cut plan and pressure the stock

• ▼Charter Communications shares pressure down — loss of 233,000 internet subscribers outweighs the cost-cut plan

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