Shares of Comcast (CMCSA -0.05%) fell 9.1% on Thursday after the cable and entertainment colossus said its broadband subscriber growth was stalling.
Comcast's revenue rose 5.1% to $30 billion in the second quarter. The company's studios and theme-park segments rebounded as more people returned to movie theaters and resorts.
Yet Comcast's broadband business saw its new-customer account growth come to a halt amid heightened competition from the likes of T-Mobile and AT&T. Wall Street had expected Comcast to add 84,000 broadband subscribers during the quarter.
Growth in the company's fledgling Peacock streaming service also slowed. Streaming subscribers were flat at 13 million, despite Comcast's heavy investments in the platform.
Comcast also shed 521,000 video customers during the quarter, continuing the trend of people cutting the cable cord and switching to alternative forms of entertainment.
Still, despite these challenges, Comcast's adjusted net income jumped by 14.3% to $4.5 billion, due largely to cable price increases. And share repurchases helped to drive the company's adjusted earnings per share higher by 20.2% to $1.01.
Comcast could find it harder to grow its sales and profits in the coming years if its broadband and streaming businesses fail to achieve their subscriber-growth targets. Customers will accept cable price increases only up to a point. Eventually, many are likely to choose less expensive entertainment options.
In the meantime, Comcast continues to reward its shareholders with sizable capital returns. The cable giant paid $1.2 billion in dividends and bought back $3 billion of its stock in the second quarter alone.