Capping a week of earnings calls with CEOs in many industries slashing forecasts and warning of dire impact from Donald Trump‘s tariffs, Charter Communications‘ Chris Winfrey advanced a different view.
Speaking to Wall Street analysts on the company’s first-quarter call Friday morning, Winfrey characterized the tariffs in favorable terms, though he gestured to the uncertainty gripping corporate America.
“Charter’s an American company offering services to more than 57 million U.S. families and businesses,” he explained about the Stamford, CT-based provider of Spectrum broadband and pay-TV. “We have a 100% U.S.-based workforce, so naturally our preference is to buy American-made products when they’re available and when they’re priced competitively.”
He continued, “Saying the obvious, tariff imbalances are by definition unfair. Clearly, President Trump has taken a strong stand that. At least from the outside, it appears to be creating an important opportunity for other countries to lower their tariffs and eliminate trade barriers and, from our perspective, to benefit U.S. workers like ours and our U.S.-based customers. But again, stating the obvious, we hope it can all happen soon and we’re hoping that’s the case.”
CFO Jessica Fischer addressed how the tariffs would factor into Charter’s financial outlook. “I don’t expect tariffs to have a meaningful overall impact on our capital expenditures,” she said, noting that the company has reiterated its guidance of $12 billion in spending “even including what we expect for the impact of tariffs today.”
CEOs at Procter & Gamble, American Airlines and PepsiCo have told analysts in recent days that the on-again/off-again tariffs are rattling consumers and making it difficult for companies to plan. Media companies have been decidedly more sanguine, with Comcast, Imax, TelevisaUnivision and Netflix all indicating few concerns as of now.
Winfrey was CFO of Charter when Trump was elected for his first term in 2016. The following year, after he was inaugurated, former CEO Tom Rutledge visited the White House to announce the company’s commitment to $25 billion in spending on broadband infrastructure.
“They created a culture of customer service and excellence,” Trump said during the Oval Office meeting with Rutledge and other officials. “Most importantly, they brought back many jobs that had been shipped overseas, something that is happening far too often. But we’re changing that.”
Charter stock rose 8% in early trading Friday on the company’s earnings report, which included better-than-expected total revenue of $13.74 billion. The company shed 60,000 internet customers in the January-to-March period, partly due to the L.A. wildfires. It also saw a decline of 181,000 video customers, which was a marked improvement from the prior-year quarter’s loss of 405,000. Winfrey and Fischer cited the benefits of integrating streaming services like Max, Disney+ and Peacock into Spectrum plans, pegging the net value per month to customers at upwards of $80.
The bottom line was a blemish on the quarterly numbers. Earnings per share came in at $8.42 per share, well below the compared with consensus outlook by analysts of $8.69.
Media companies thus far have insisted they are not vulnerable to the tariffs, which were ramped up significantly after the March 31 end of the first quarter. Comcast execs on Thursday said they have not seen any impact in their theme park or ad businesses. Tech companies will report earnings next week, notably Apple next Thursday. With China leading the list of countries with which the U.S. has escalated trade conflict, investors are eagerly awaiting the views of Apple CEO Tim Cook and other CEOs.
