CHARTER CLUBBED

Loss of 122,000 subs slams stock

Cable giant Charter Communications revealed steeper-than-expected subscriber losses on Friday, stoking fears that a customer stampede out of pay-TV services is quickening.

The country’s second-largest cable company said it lost 122,000 video subscribers in its first quarter — nearly triple the 43,000 loss expected by analysts — in the latest signal that cable is losing ground fast to cheaper video-streaming services from Amazon and Netflix.

The news sent Charter’s stock down 16 percent in early Friday trading — its worst decline since it emerged from bankruptcy in 2009 — before recovering to close at $263.33, down 12 percent.

Shares of rivals likewise dropped, including Optimum owner Altice USA, down 9.3 percent. Comcast, which admitted earlier this week it lost 96,000 subscribers in the most recent quarter versus an expected 75,000, fell 4.5 percent.

Charter placed some of the blame on a one-time move to jettison thousands of customers who weren’t paying their bills — a housecleaning it said it will complete by the end of the second quarter.

Another drag on performance was Charter’s integration of two systems acquired in May 2016: Time Warner Cable for $55 billion and Bright House Networks for $10.4 billion. Charter Chief Executive Tom Rutledge said on a conference call the integration, despite some “lumpy aspects,” was “going quite well.”

Charter’s revenue rose 5 percent, to $10.66 billion, and earnings per share were 70 cents versus Wall Street’s forecast of 44 cents.

Nevertheless, subscriber losses moved MoffettNathanson analyst Craig Moffett to write in a Friday update, “Cable is currently out of favor.”

In the fourth quarter, Charter had posted a slight gain of 2,000 cable TV subscribers. Just a year ago, Comcast had added 42,000 video subscribers in the year-earlier quarter.

The sharp reversal underscores the growing appeal of lower-priced skinny cable bundles and Web-based alternatives like Netflix.

Conventional wisdom has had cable companies participating in that growth by providing the “pipes” to deliver those alternatives. Yet the quarter produced ominous signs even on the so-called broadband front.

Charter reported 331,000 residential internet additions for the quarter — a 22 percent decline from the 428,000 reported in the yearearlier period.

Comcast recorded a similar deceleration in internet additions, raising the question of whether broadband growth can offset continued cord cutting.