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Comcast's Q4 Results Lift Cable Sector Stocks

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Comcast shares rose by more than 7% in early trading Thursday after reporting record fourth quarter broadband subscriber growth, news that drove other stocks in the sector up and fueling optimism that similar results could be in store for other cable operators.

Comcast shares rose as high as $52.20 each (up 7.8%) on Jan. 28 after it reported it had added 538,000 broadband customers in Q4 and more than 2 million additions for the full year. While Comcast warned investors that 2020 growth, fueled mainly by the pandemic, shouldn’t be expected this year -- the company said they should expect performance similar to its 2019 gains -- that didn’t dampen enthusiasm for the shares. 

Comcast’s good fortune also bodes well for other cable operators that haven’t released Q4 results yet. Charter Communications, scheduled to release its Q4 results tomorrow morning (Jan. 29), saw its shares rise nearly 9% ($54.96 per share) on Jan. 28, while Altice USA (scheduled to release year-end results on Feb. 10) rose 8.2% ($2.81 each) to $36.99 per share. Cable One, the top performing cable stock in 2020, saw its shares rise as much as 8.1% ($155.07/ Jan. 28 to $2,069.14 each.   

The stocks continued that momentum later in the day, with Charter up 8% ($49.48) to $665.26 each; Comcast up 7.7% ($3.73) to $52.15; Altice USA up 7.6% ($2.59) to $36.77 and Cable One up 7.6% ($145.93) to $2,060 each. 

Analysts are expecting Charter to add about 350,000 broadband customers in Q4, below its record-setting Q2 growth of 850,000 additions, but still ahead of the 2019 mark of 313,000 residential gains. Altice USA is expected to report  broadband gains of about 15,000 subscribers, pushing its overall yearly gain to more than 200,000.