Shares of broadband and video services provider Altice USA (NYSE:ATUS) tumbled on Friday following a first-quarter report from Charter Communications (NASDAQ:CHTR) that featured slowing customer growth. Altice stock was down about 10% at 3 p.m. EDT, while Charter stock was down about 12%.
Charter reported that its total residential and small and medium-sized business customers increased by 261,000 during the first quarter, down from growth of 355,000 in the first quarter of 2017. The company added 362,000 internet customers, but it lost 112,000 video customers and 25,000 voice customers.
Despite Charter beating analyst estimates for both revenue and earnings, this subscriber growth slowdown and the slump in video and voice customers was enough to drag down shares of other cable companies as well.
Altice last reported its quarterly results in February. During the fourth quarter, Altice added 25,000 internet customers but lost 25,000 TV customers. Overall residential customer additions totaled just 7,000.
With internet streaming services like Netflix only getting more popular, cable companies are having a tough time holding on to TV subscribers. Whether Friday's slump for Charter and Altice is an overreaction depends on whether Charter's growth slowdown is an isolated event or a sign of things to come.