(Reuters) - Charter Communications Inc’s (CHTR.O) shares sank on Thursday after it lost twice as many pay TV subscribers as expected, in the face of competition from Netflix and Hulu.
The company’s profit fell nearly 75 percent as it lost 104,000 video customers in the third quarter ended Sept. 30. Analysts on average had expected 49,000, according to research firm FactSet.
More and more consumers are deserting pay TV bundles for cheaper online streaming services, mounting pressure on traditional cable companies such as Charter and Comcast Corp (CMCSA.O).
Netflix Inc (NFLX.O), the world’s leading video streaming service, said last week it added 5.3 million subscribers in all its markets in the third quarter, beating Wall Street forecasts of 4.5 million.
“It’s true that there are lots of pressures on the video bundle, the biggest pressure being price,” Charter Chief Executive Thomas Rutledge said on a call with analysts.
Comcast, the No.1 U.S. cable operator, said on Thursday it lost 125,000 video subscribers in the third quarter, mainly due to the recent hurricanes and more competition in the pay TV industry.
Comcast said last month it would lose 150,000 subscribers in the third quarter, sending its shares down 6 percent after the forecast.
“When Comcast infamously cut their Q3 unit growth guidance in September, investors were quick to cut their numbers for Comcast. They were slower to adjust their numbers for Charter. They should have,” said Craig Moffett, an analyst at MoffettNathanson Research.
Stamford, Connecticut-based Charter also attributed a small number of its subscriber losses to hurricanes Harvey and Irma.
Shares of Charter, which have risen about 20 percent this year, fell 8.5 percent to $315.81 in afternoon trading.
Charter’s profit was also dented by a 37 percent surge in its capital expenditure to $2.39 billion.
Net income attributable to shareholders fell nearly 75 percent to $48 million, or 19 cents per share. Analysts had expected earnings of $1.02 per share, according to Thomson Reuters I/B/E/S.
However, total revenue rose 4.2 percent to $10.46 billion, as Charter signed up more subscribers for its internet services.
Reporting by Arjun Panchadar in Bengaluru; Editing by Sai Sachin Ravikumar