Comcast's Bad Day

A seemingly minor comment had a major impact on Comcast shares today.

The trouble began at Bank of America's media investment conference, where Comcast's chief financial oficer said that the company's broadband subscription growth would be a bit slower than expected.

The cable and media giant fell 7.3% on the news, the stock's worst day since the March 2020 Covid selloff.

This was the worrisome quote from CFO Michael Cavanagh:

We are really proud of the performance of the broadband business and the cable business broadly through the last two years through Covid and feel really well positioned as we look to the future. But you're right, Covid has been a big disruption to the business. I mean it's really disrupted the patterns of our customers in terms of move patterns, seasonal activity back-to-school and the like. And especially with the Delta wave that we've been facing, especially in the last couple of months, we're not settled down and close the kind of disruptions caused by Covid.

He added that the company was seeing a "little bit of a slowdown in the net adds in the cable business." 

The slowdown is coming off a banner 2020 year for broadband,  Nicholas Jasinski explains on Barrons.com:

The shift to working and entertaining from home during the early months of the Covid-19 pandemic motivated millions of Americans to upgrade their internet connections. That was a boon for the likes of Comcast, Charter, and Altice.

...

This year is vastly different. Covid-19 vaccines have been rolled out, many workers have returned to their offices, and government restrictions on in-person activities have been lifted.

Americans certainly aren’t canceling their home-internet subscriptions en masse, but there is less pressure to sign up for better service now than there was 12 months ago. And some of last year’s upgrades pulled forward demand that would have otherwise helped lift this year’s numbers.

The strong reaction suggests investors remain very worried about post Covid habits from consumers. Even the internet seems vulnerable.