Comcast stock fell 7% in early trading Tuesday after cable division CEO Dave Watson told a virtual industry audience that the nation’s top cable operator will add about 1.3 million broadband subscribers in 2021, implying that Q4 high-speed internet subscriber additions will be about 185,000 customers, the lowest growth in years.
“We’re going to wrap up the fourth quarter and deliver a really solid year,” Watson said at the UBS Global TMT Virtual Conference. “We’re going to be around 1.3 million broadband additions for the year.”
Comcast added about 1.9 million broadband customers in 2020 and 1.4 million in 2019. So far in 2021, the company has added about 1.115 million broadband customers, so to reach 1.3 million for the full year, Q4’s tally will be about 185,000 additional customers. That’s the lowest quarterly addition figure for the company since Q2 2017 when it added 175,000 broadband customers.
Comcast shares were priced as low as $48.72 each on Tuesday morning, down 7%, or $3.63 per share. Watson’s comments also affected other stocks in the sector -- Charter Communications fell 5% to $639.28 in early trading Tuesday and Altice USA was down about 6.7% to $15.80 per share.
Most cable analysts predicted that broadband additions would be about 1.4 million in 2021.
Later at the UBS conference, Altice USA CEO Dexter Goei said that he was hopeful Q4 broadband additions would be positive, but at the moment are trending slightly negative, meaning the company could lose about 5,000 to 10,000 broadband customers in 2021.
While the broadband slowdown is expected to continue, Watson said Comcast would add a record number of mobile customers in Q4, after signing on 285,000 additional Xfinity Mobile customers in Q3, its best quarterly performance since launching the wireless product in 2017. At the UBS conference, Watson said Comcast expects cable EBITDA growth to be in the 7% to 8% range in Q4 (beating most analysts' expectations), while net cash flow growth will be in the low double-digit percentages.
“In wireless, we’ll beat Q3 in Q4,” Watson said. “We’ll set a record.”
Comcast launched Xfinity Mobile in April 2017 to its broadband customers and had about 3.7 million subscribers at the end of Q3. At the UBS conference, Watson said he sees wireless as “one of the largest addressable market opportunities” Comcast has.
“We’ll set a record here in Q4. Our view is that all 32 million broadband customers should get two lines [each],” Watson said. "And we should have an opportunity to go to all of them, so that’s 64 million lines of opportunity just within our footprint. We’re not going to stop growing broadband.”■
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Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.
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