Comcast Shares Drop After Forecast of Slow Broadband Growth

Comcast Shares Drop After Forecast of Slow Broadband Growth

Comcast will add 185,000 broadband subscribers for the fourth quarter compared to the 538,000 it added in the fourth quarter of 2020. 

As the nation’s leading cable companies have continued to bleed cable subscribers, they have at the same time added broadband ones. During the uptick of the pandemic in 2020, the major providers added 4.8 million broadband subscribers, according to Leitchman Research Group. 

Comcast, in 2020, added nearly 2 million broadband subscribers, which was the second-most of any cable company besides Charter, which gained 2.2 million. That growth has continued in 2021, with Comcast leading the way in the third quarter of 2021 with 300,000 broadband additions, giving them a total of about 31.7 million broadband subscribers.  

However, a new report this week says that Comcast is expecting slower-than-expected broadband growth- a report that caused the company’s stock to dip Tuesday. 

According to CNBC, the president and CEO of the company’s cable business, Dave Watson, said this week that the company expects to add 1.3 million broadband subscribers this year, which is short of the 1.4 million that analysts had expected. Watson’s comments came at the UBS Global TMT Virtual Conference. 

Based on those figures, as calculated by the network, Comcast will add 185,000 broadband subscribers for the fourth quarter, compared to 538,000 in the fourth quarter of 2020. 

This caused the company’s stock to drop more than 5 percent on Tuesday, even as tech stocks rose that day. The stock dropped as low as $49.27 on Tuesday, though slightly by the end of the day. 

Additionally, The Motley Fool reported that at that same UBS conference,  Comcast CEO Brian Roberts said that the company would be “looking at just 7% to 8% growth in earnings before interest, taxes, depreciation, and amortization (EBITDA)” when it reports fourth-quarter earnings next month.  

As for the traditional cable business, Comcast lost 407,000 pay-TV video subscribers in the third quarter, leaving them with about 18.5 million. That remains the most video subscribers of any U.S. pay-TV company, but represents a loss of about 1.5 million over the course of the previous year, as Comcast had just over 20 million cable subscribers as of the end of the third quarter in 2020.  

Comcast announced at the start of the month that it would be raising cable prices again in 2022, including a rise of as much as $4.50 a month to its “Broadcast TV Fee,” and an additional $2 to its Regional Sports Network Fee. Some broadband packages will see increases too. 

“Customers on promotional pricing will not see that pricing change until the end of the promotion, but the RSN and Broadcast TV fees will increase because they're not part of the promotional pricing,” a spokesperson for the company told Ars Technica.  

Stephen Silver, a technology writer for the National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver. 

Image: Reuters