Charter Communications (NASDAQ:CHTR) saw its stock decline 3.0% to $122.69 on Friday, July 24, 2026, after the cable operator disclosed a significant shortfall in broadband subscriber additions and revised its full-year earnings outlook downward. The shares earlier touched a session low of $108.76 before recovering slightly, as trading on the Nasdaq remained active.
The company reported a net loss of 172,000 internet subscribers in the second quarter, exceeding the consensus estimate of a 140,712 decline by roughly 22%. This performance lagged behind rival Comcast (NASDAQ:CMCSA), which lost 167,000 residential broadband subscribers in the same period. However, Charter managed to add 406,000 mobile lines, beating the projected 382,706, while video subscriber losses narrowed to 21,000, significantly better than analyst forecasts.
Charter now expects its standalone EBITDA to decline by approximately 1% in 2026, excluding costs related to the Cox transition. Earlier guidance had called for modest EBITDA growth. The revised outlook underscores the challenges facing the cable industry as competition from telecom giants intensifies.
In contrast, AT&T (NYSE:T) reported 646,000 new internet connections, including those from acquisitions, while Verizon (NYSE:VZ) added 348,000 broadband subscribers. Although definitions vary, the diverging trends highlight the pressure on cable operators.
Despite the subscriber weakness, Charter posted a 16.1% increase in diluted earnings per share to $10.66, even as net income edged down 0.7% to $1.292 billion. The EPS boost was largely driven by aggressive share repurchases, with the average diluted share count falling 14.4% to 121.3 million. During the quarter, the company bought back 4 million shares for $838 million, or an average of $209.50 per share, consuming 86% of its free cash flow. At the current market price of $122.69, that stake would be worth roughly $491 million, highlighting the gap between deployment and market value.
Chief Financial Officer Jessica Fischer announced that share repurchases have been paused through the end of the third quarter, with plans to resume in the fourth quarter. The pause comes as Charter prepares to complete its acquisition of Cox Communications, expected by mid-to-late August. The deal will result in the issuance of more than 46 million new equivalent shares, bringing the total share count to approximately 177 million.
Debt remains a key concern. At the end of June, Charter reported $93.8 billion in principal debt and $509 million in cash. The company has set a target leverage ratio of 3.5 times following the transaction, with management expecting to achieve this within three years.
Chief Executive Chris Winfrey acknowledged the difficulty in predicting when broadband growth will rebound, stating it is “hard to predict.” Charter is maintaining its 2026 capital spending outlook at approximately $11.4 billion, with expectations of a steep reduction once network upgrade projects are completed.
The market reaction reflects investors distinguishing between operating growth and EPS growth driven by financial engineering. Charter now faces the challenge of demonstrating that cash flow and merger synergies can outweigh ongoing broadband subscriber losses. Risks include quicker stabilization in broadband and benefits from Cox synergies, which could boost cash flow, while continued customer attrition, integration setbacks, or slower deleveraging could widen the valuation discount.
