Charter Communications (Charter Communications (CHTR)) had a rough start to Friday. The stock hit a new 52-week low in premarket trading after the company reported second-quarter earnings that, while beating Wall Street estimates, showed continued broadband subscriber losses, weaker revenue, and lower profitability. But by the time the market opened, the stock had recovered most of its early losses, trading down just 1.11% at last check.

Let's break down what happened.

Earnings Beat Expectations

Charter reported revenue of $13.53 billion, down 1.7% from a year ago but slightly above the analyst consensus of $13.51 billion. Adjusted earnings came in at $10.66 per share, beating the $10.14 estimate. So the headline numbers were fine—better than fine, actually. But investors were focused on the subscriber losses.

Broadband Business Remains Under Pressure

The cable and broadband provider lost 172,000 internet customers in the quarter, compared with a loss of 116,000 a year earlier. That's a 48% increase in customer losses. Video customer losses narrowed to 21,000 from 80,000 a year earlier, helped by simplified pricing, revised packaging, and the addition of streaming services to Spectrum's expanded basic packages. But the broadband number is the one that matters most, and it's not moving in the right direction.

During the earnings call, CEO Chris Winfrey acknowledged the competitive pressure. "A competition for new customers from expanded competitive footprint remains high," he said. He expects broadband growth to eventually stabilize as Charter expands bundled offerings, improves customer service, and rolls out faster network capabilities. Adjusted EBITDA margin narrowed 110 basis points to 40.3%.

Mobile Growth and Cox Deal Support Outlook

Wireless was the bright spot. Charter added 406,000 mobile lines in the quarter, bringing its total to 12.5 million as of June 30, 2026. The company also said bundling programmers' streaming apps into Spectrum packages helped reduce churn and attracted some customers during Disney's carriage dispute with YouTube TV.

Winfrey said Charter expects its broadband business to stabilize and eventually return to growth through improved converged connectivity product and pricing, according to The Hollywood Reporter. He also addressed reports of discussions with SpaceX (SpaceX (SPCX)) regarding Starlink-powered mobile services, saying Charter regularly speaks with industry participants but declined to comment on specific conversations.

On the M&A front, Winfrey said Charter expects its pending $34.5 billion acquisition of Cox Communications to close in mid- to late August. He said the company has a detailed integration plan and expects about $800 million in transaction-related expense synergies, with the potential to reach $1 billion over time.

Cash Flow, Capital Spending, and Debt Plan

Free cash flow declined to $969 million from $1.05 billion a year earlier as capital expenditures increased. Net cash provided by operating activities totaled $3.93 billion. Charter ended the quarter with $509 million in cash and cash equivalents and served 29.4 million internet customers.

The company also announced a debt exchange plan that would allow it to repurchase certain existing bonds using cash and newly issued debt. Charter said it may repurchase about $10 billion of existing bonds issued by Charter-affiliated subsidiaries and Time Warner Cable, while separately offering to purchase another $9.7 billion of subsidiary-issued bonds, subject to a cap. The company also plans to issue up to $3.5 billion of new bonds maturing in 2038 and 2041, depending on the outcome of the exchange offer, Bloomberg reported Friday.

Outlook

Charter reiterated its 2026 capital expenditure forecast of about $11.4 billion, down from $11.7 billion in 2025.

Charter Communications Stock Tanks—Then Recovers

Charter shares were down 10.67% at $113.00 during premarket trading on Friday, hitting a new 52-week low. But the stock recovered much of its early losses after the market opened and was down just 1.11% at $125.09 at last check. The market seems to be taking a wait-and-see approach, balancing the subscriber losses against the earnings beat, mobile growth, and the Cox deal.