Raymond James Highlights Charter's Impact on Equipment Vendors

Overview of Charter's Q1 Results#

Raymond James recently reviewed the first-quarter 2026 results of Charter Communications, focusing on how these results might affect equipment vendors such as Harmonic, Applied Optoelectronics (AAOI), and others. Charter reported capital expenditures (capex) of $2.86 billion, which surpassed both Raymond James' estimate of $2.68 billion and the broader market's expectation of $2.64 billion. While this figure represents a 14.4% decline from the previous quarter, it shows a 19% increase compared to the same quarter last year.

Future Capex Guidance#

Charter has maintained its capex guidance for 2026 at $11.4 billion. However, the company anticipates a significant decline in spending beyond this year, projecting capex to drop to approximately $7.5 billion to $8 billion by 2028. This decline is expected to be more pronounced in 2027 and 2028, indicating a shift in their capital investment strategy.

Customer Trends#

In terms of customer metrics, Charter reported a net loss of 117,000 residential broadband customers in Q1 2026, which is consistent with the previous quarter's loss but worse than the 55,000 loss from the same quarter last year. Additionally, the company lost 51,000 video subscribers, a smaller decline compared to the previous year's loss of 167,000.

Harmonic's Developments#

Harmonic Inc. is actively moving forward with the sale of its Video business to LeoneMedia Inc., with the deal expected to finalize in the first half of 2026. This sale has led Harmonic to classify its Video business as discontinued operations, allowing it to concentrate solely on its Broadband segment. Analysts from Rosenblatt and Needham have raised their price targets for Harmonic, citing strong performance in broadband. The company's recent quarterly results showed record bookings and a significant growth in revenue, exceeding expectations for the third consecutive quarter. Furthermore, Harmonic has announced upgrades to its XOS Advanced Media Processor, aimed at supporting next-generation television standards.