Shares in cable TV and broadband services provider Charter Communications tumbled Wednesday on its plans to hike capital spending on its communications network, taking Comcast with it. But while CMCSA and CHTR stocks fell, shares in network equipment supplier Harmonic jumped, lifting other gear makers.
CHTR stock plunged 16.4% to 328.34 in morning trading on the stock market today. Shares in Comcast, the biggest cable TV company, also dipped, down 3.7% to 35.35. Comcast had earlier signaled higher capital spending for CMCSA stock buybacks.
Meanwhile, HLIT stock jumped 7.7% to 14.21 on Wednesday.
Shares in a few other suppliers of cable TV network gear also moved up, including CommScope, Casa and Ciena.
CHTR Stock: $5.5 Billion Added To Plan
At an investor event it hosted Tuesday, Charter said it expects to spend $5.5 billion more than previously forecast on its network over the next three years.
From 2023 to 2025, CHTR stock analysts expect capital spending to be in a range of $10.5 billion to $10.8 billion.
Charter has a new chief executive, Chris Winfrey.
CHTR stock analyst Simon Leopold of Raymond James expects Harmonic to be a beneficiary from higher capital spending.
"The plan is likely most incremental to Harmonic because it has not had a substantial position in Charter's broadband distribution and claims an advantage in the remote PHY (physical layer) architecture," Leopold said in a note to clients. "Also, Harmonic is the supplier of the virtual CMTS (cable modem termination system) to Comcast and also supplies a significant portion of Comcast's node deployment, which suggests it's well positioned to do the same at Charter."
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